Disposition
STUDENT
MAG. NADA INA PAUER
DISSERATION TITLE
The Single Economic Entity Doctrine and Corporate Group Responsibility in
European Antitrust Law
DISSERTATION SUPERVISOR : Mag. Dr. Florian Schuhmacher, LLM.
Abstract:
The assessment of legally independent, but economically associated undertakings in regards to the
interdiction of cartels is one of the most comprehensive and essential issues of European antitrust
law1. The reasons for integrating companies into a group vary due to object and purpose of legal
conditions and are determined by corporate law. In connection with Art 101 paragraph 1 TFEU2 it
is vital to assess the criteria of the construct of a single economic entity in regards to the
exemption of agreements between affiliated undertakings within its scope, as well as
distinguishing them from the issue of attributing of liability between these respective corporations.
For this second issue, it is vital to discern the independently acting entities of a group and their
managerial organization in order to ascertain the appropriate addressee(s) of sanctions.
1
Cf Mestmäcker/Schweitzer, Europäisches Wettbewerbsrecht, Baden Verlag, München 2004, 2end edition, §8,
recital 51.
2
Treaty on the Functioning of the European Union (Lisbon Treaty), Official Journal of the European Union, C
115/49; It will be referred to as “the Treaty” in the following text.
1
Table of Contents
I.
Introduction
II. The Single Economic Entity Doctrine as Essential Criterion for the Application of Antitrust
Law on a Corporate Group
III. The Concept of Corporate Liability in European Antitrust Law
IV. Implications of the Recent Principles in European Antitrust Law on the International and
Member – State Level
V. Methodology
VI. Bibliography
2
I.
Introduction
The question whether parent companies could be held liable for antitrust violations of their
subsidiaries, and thus the criteria under which conduct is to be attributed within a corporate group,
has repeatedly been raised since the European Court of Justice’s (ECJ’s) Stora decision3. This topic is
of high relevance in practice due to the implications it has on the application of antitrust principles
created by the practice of the Commission as well as on case-law by the CFI and ECJ on an affiliated
group of undertakings. As the following outline of my thesis will show, recent case law not only
proceeds previous principles but tends to hold the parent corporation jointly and severally
responsible for infringements committed within a corporate group in such a way that some authors4
have already assessed a certain “clan liability” to now exist in European antitrust law.
The Treaty itself neither provides a legal basis for the attribution of responsibility, nor does it answer
the question which legal entity is to be considered with regard to the penalty limitation of 10 percent
of the undertaking’s yearly sales volume, which according to Art. 23 (2) of the Regulation 1/2003 the
fine may not exceed5. After previous decisions had left doubts on the criteria under which parent
corporations could be held liable, the Court clarified its jurisdiction on September 10th 2009 in the
Akzo Nobel Case6.
In this case, the ECJ clarified its position on the presumption of joint and several liability of parent
companies for cartel infringements committed by their wholly owned subsidiaries. The judgment has
given the parent-daughter liability debate an important input of discussion and raised once more the
controversial issue of the conditions to consider when applying European antitrust principles on a
corporate group in general. In this context it is essential to reflect on the means of applying
previously established legal constructs and principles in the administration of antitrust law on
corporate groups, specifically the doctrine of a “single economic entity” and evaluate the consistency
and comprehensiveness of the European Institutions’ practice in this regard. The question remains,
if the aimed-for goal of deterrence has been adequately implemented in the light of a “fault-based
liability”- approach anchored in the Treaty. Finally that fact that modern businesses today are often
confronted with several jurisdictions at a time should make it a high priority of federal agencies
charged with the responsibility of enforcing antitrust law to apply these laws in consistency with
common litigation principles applied by several states and in respect to the principles of comity and
non-intervention of international law.
The aim of the my thesis is to assess the conditions under which a parent company is to be held
liable for the anticompetitive business practices of its subsidiaries using the “single economic entity
3
Case, C- 286/98 P, Stora Kopparsberg Bergslags AB v Commission of the European Communities (2000), E.C.R.
I-9925; (2001), 4 C.M.L.R. 12. Alexander Riesenkampf and Udo Krauthausen, “ Liability of Parent Companies for
Antitrust Violations of their Subsidiaries”: (2010) E.C.L.R. Issue 1, 38.
4
Cf Michael Kling, “ Die Haftung der Konzernmutter für Kartellverstöße ihrer Tochterunternehmen”, WRP
2010, 506.
5
See Riesenkampf/Krauthausen, ibid.
6
Case C-97/08, Akzo Nobel NV v. Commission, Judgment of the Court on 10 September 2009. Akzo Nobel is a
multinational pharmaceutical corporation, chemicals and healthcare company of Dutch “origin”.
3
doctrine” applied by the Commission and confirmed by the European Court of Justice and evaluate
the implications this has on the business conduct of corporate groups7 .
II.
The Single Economic Entity Doctrine as Essential Criterion for the Application of
Antitrust Law on a Corporate Group
Subject of the interdiction of cartel activities under Art 101 (1)8 of the Treaty on the
Functioning of the European Union are, according to extensive case-law by the Community Courts,
undertakings and associations of undertakings. The interpretation and assessment of the term of an
undertaking9 must be made considering the Treaty’s antitrust principles aim of granting a harmonic
and functioning competition in the Union’s common market. Whereas the application of the
competition rules on undertakings has been extensively regarded under European case-law, the
existence of corporate groups still leaves unsolved questions, especially in regard to the aim of a
differentiated treatment considering the “spirit and purpose” of forming a corporate group. The
assessment of these issues is necessary in order to evaluate whether the current practice accounts
for an appropriate and comprehensive application of the European antitrust provisions.
The European practice includes different facts under the term of a corporate group: a majority
shareholding, concerns10, associated undertakings, mutual influence and control etc. Thus it seems
useful to use the term of a “corporate group” for the purpose of discussing the special treatment of
affiliated undertakings in European antitrust law. To define this term the ECJ has built on the legal
construct of a “single economic entity”11. The relevance and extensive use of this term in the Court’s
case-law as well as in the practice of the European Commission can be observed on the one hand in
the creation of the “intra-enterprise doctrine”, exempting agreements between undertakings of a
corporate group from the application of Art 101 TFEU12 and on the other as a reference when judging
the attribution of liabilities between companies of a group.
So what defines the principle of a single-economic-entity and how has recent case-law changed its
perception in European Antitrust Law in respect to the intra-enterprise privilege as well as the
subject of conduct-attribution? Despite a different initial situation the question is whether one can
assume certain interrelations between these two issues and thus draw conclusions from the
conditions of the former for the purpose of the latter.
a. The practice of the European Commission
7
Of course comprising multinational corporations that are active on the international market.
Ex Article 81 TEU.
9
To the fact of “associations of undertakings” in Art 101 TFEU and its treatment in context with the topic of
corporate groups, see below under point III of this outline.
10
For the issue of attributing the characteristics of an undertaking to a concern for certain aspects and cases,
see Immenga/Mestmäcker, Gesetz gegen Wettbewerbsbeschränkungen, Kommentar, vol.1, 3rd Edition, 2001,
§1 recital 45.
11
That this linguistic idiom is even being used for applying it equally with the term of an undertaking will be
discussed later on.
12
This phenomenon has first been used by the Commission under the context of the application of Art 101
TFEU (ex. Art 81 TEU) in its decision in Christiani & Nielson (Negative clearance Art.81(1) [ex 85(1)] Official
Journal : L 165 - 5/07/1969 Page : 1) in the early 1970ies.
8
4
In Europe, the Commission is vested with powers to prosecute and impose fines on companies that
have been directly involved in cartel activities13. The Commission has been concerned with the
assessment of corporate groups for the means of an appropriate application of the European
antitrust provisions for the past forty years now14.
Regarding the question of attributing liability in a concern, it had been uncontested so far that the
Commission may hold a parent company jointly and severally liable for antitrust infringements by its
subsidiary and subsequently the payment of the fine, if it is established that the “subsidiary does not
decide independently upon its own conduct on the market, but carries out, in all material respects, the
instructions given to it by the parent company, having regard in particular to the economic,
organizational and legal links between those two legal entities”15. Furthermore, it is not necessary for
the parent to have played a substantial role in the perpetration of the infringement, or even to have
had knowledge about the subsidiaries’ infringing behavior in order to be held liable16. Instead it is
sufficient to prove that the parent has the ability to exercise decisive influence over the conduct of
the subsidiary. In some previous decisions, especially regarding the intra-enterprise doctrine, the
court had required for the mother corporation to actually exert such influence17.
Contested had been the issue whether this decisive influence could be assumed in the case of a
100% shareholding by the mother corporation and what the scope of this influence would have to
be.
The parent-daughter liability debate finds its justification in the fact that under community law, the
prohibition against cartels (Art. 101 (1) TFEU) applies, as already mentioned, to independent
undertakings. Due to extensive consideration by the Community Courts following a distinct
functional approach18 , this concept is generally defined as “a unitary organization of personal,
tangible and intangible elements , which pursues a specific economic aim on a long term basis,
regardless of its legal status and the way in which it is financed”19. In the context of large corporate
groups, the whole group or individual sub-groups or subsidiary companies may be treated as
undertakings for the purpose of Art. 101 (1) TFEU. The former situation of evaluating an entire group
to constitute a undertaking will undoubtedly be the case, if, as stated above, a subsidiary is not able
to determine autonomously its behavior on the market. Under these circumstances, parent and
subsidiary belong, according to the recent line of case law, to the same economic entity and
therefore are held to constitute a single undertaking for the purpose of competition law.
13
See Yves Botteman and Laure Atlee „An update on parent liability for antitrust violations of subsidiaries“,
Steptoe’s EU Competition Practice,
http://www.steptoe.com/assets/attachments/EU%20Comp%20Briefing_%20Dec%202009.pdf, p1.
14
See the Commission’s decision 69/195 of June 18 1969, Christiani and Nielson, OJ 1969, L165.
2
See, e.g., Case C-286/98 P, Stora Kopparbergs Bergslags AB v. Commission, [2000] ECR I-9925, para. 26.
16
See Case T-325/01, DaimlerChrysler AG v. Commission, [2005], ECR II-03319, para. 221.
17
Case 107/82, AEG v. Commission, [1983] ECR 3151, at para. 49. I will evaluate this prerequisite in the
following discussion on the dogmatic classification of these principles.
18
Cf Schröter, in von der Groeben/Schwarze, preliminary ref. on Art.81-85, recital 22; Stockmann, in
Wiedemann, Handbuch, § 7 r 1 a.o.
19
Mestmäcker/Schweitzer, fn 21, § 8, Recital 6; Consider however that this is very generally held and that a
fixed legal term does not exist, See Petra Pohlmann, Der Unternehmensverbund im Europäischen Kartellrecht,
Duncker &Humblot Berlin 1999, 35 et seq.
5
Even though in most cases the economic unit will consist of a large number of persons, natural or
legal, the infringement must be imputed to a legal person against whom the fines may be imposed20.
Thus, the Commission, when confronted with economic units consisting of groups of legal entities,
has (even before the case of Akzo) addressed the Statement of Objections and the decision imposing
the fines to the ultimate parent company of the group, in order to insure full payment of the fines.
This way, the Commission avoided the risk that the subsidiary (or the parent) organize their
insolvency well before the issuance of the decision.
The practice of the European Commission previous to the Akzo Nobel case can be summed up in a
“belt and braces” approach which established liability on two legs21: First, the exertion of decisive
influence was presumed on the basis of a 100% shareholding, reinforced however with supporting
elements based on the Stora judgment (braces). In recent times however, the Commission has, for
the reasons stated above22, considered the “belt” sufficient for establishing liability on the basis of
the presumption alone23. The Commission made it clear that any presumption of decisive influence in
cases of wholly owned subsidiaries nevertheless remains rebuttable 24. Up to the fall of 2009 this
practice could not draw on a clear line of jurisdiction of the Courts and had therefore not gone
uncontested.
b. Case law of the CFI and ECJ: The Conditions for the Attribution of Liability
When looking at previous case law the problem of dealing with affiliated groups in antitrust
procedures has been recognized in decisions going back to the 1970ies25. Based on the Christiani &
Nielson case26 the Court first developed the principle of exempting agreements of affiliated
companies from the interdiction of Art 101 (1) TFEU. But despite the basic finding of recognizing
structural incorporations in the judgment of agreements between these undertakings, uncertainty
remain(ed)s to the exact scope and dogmatic classification of this doctrine. Even as the fact of
attributing liability between undertakings of the same concern was repeatedly subject of decision or
at least affected the decision, the Court’s case-law remained inconsistent27.
Generally the prevailing view in literature assesses the attribution of liability to depend on the fact
that the parent corporation has at least the possibility to control the conduct of its subsidiaries28. The
“base” of this attribution of conduct may be the delegation of administrative powers on to a
20
The Statement of Objections drawn out by the Commission must be addressed to that person and it must
specify in which capacity that person is called to answer the allegations. See Mestmäcker/Schweitzer, fn 21, §
21, rec 18; and below point III b of this outline.
21
See Riesenkampf/Krauthausen, ibid.
22
-and also because supporting elements are sometimes not as evidently at hand-.
23
Crofts, „Alliance One Challenges Liability in Spanish Tobacco Cartel Before CFI“, http://www.mlex.com
(Sep.17, 2009).
24
Before the Akzo Nobel judgment of the ECJ this had so far been the case only one time in the Raw Tobacco
Spain case (Commission Decision 2007/236, COMP/C.38.238/B.2-Raw Tobacco Spain) where the Commission
did not hold the parent company liable for its subsidiary’s infringements, even though the said subsidiary was
wholly owned by its parent.
25
See Martin Buntschek, „Das Konzernprivileg im Rahmen von Art 81 Abs 1 EG-Vertrag“, Nomos
Verlagsgesellschaft, Baden-Baden 2002, 30.
26
R. Christiani & Nielson N.V., Decision 69/195, (1969) C.M.L.R. (Supp.) D 36.
27
The same can be said for dealing of the court with these issues regarding Art 102 and thus the influence of
this special treatment on “third parties”. This issue surpasses this outline however.
28
Cf Schroeder in: Wiedemann, Handbuch, § 8 recital 5; Gleiss/Hirsch, Kommentar zum EG-Kartellrecht, 3 Aufl.,
Rn 196 et seq.; Fleischer AG 1997, 491 et seq (500); contested Koch in Grabitz/Hilf, Art 85 recital 44, a.o.
6
subordinated legal entity. The Commission however bears the task of proving the parent
corporations potential to exert this precise influence.
Concerning the problem of a 100% shareholding by parent corporations, some previous case-law (in
particular AEG Telefunken v Commission29) appeared to merely suggest that full ownership of the
share capital of a subsidiary is per se sufficient to give rise to a presumption that the parent company
exercised decisive influence. However, in the Stora judgment30, the ECJ relied not only on the fact
that the parent company owned 100% of the subsidiary's share capital but also on other
circumstances. The ECJ held that



the parent company could exercise decisive influence over the conduct of the
subsidiary; and
as the subsidiary was wholly-owned, the Court of First Instance (CFI) could
legitimately assume“ that the parent company in fact exercised decisive influence31
over its subsidiary’s conduct, particularly since it had found (…) that during the
administrative procedure the appellant had presented itself as being, regarding
companies in the Stora Group , the Commission’s sole interlocutor concerning the
infringement in question;
in those circumstances, it was for the appellant to reverse that presumption by
adducing sufficient evidence”32.
Based on the Stora decision, it would appear that the presumption of a parent in fact exercising
decisive influence could not be made without additional criteria pointing towards the de facto
exercise of decisive influence. Due to the Court’s formulation it had been argued that the
Commission could not rely on the presumption without offering further evidence. In 2005, however,
the Court of First Instance indicated in Tokai Carbon33 that the presumption operates “without
needing to check whether the parent company in fact exercised that power”, suggesting that the
Commission did not need to refer to other indicia to establish that the parent actually exercised
decisive influence over the subsidiary34.
That the ECJ’s jurisprudence had not been completely consistent as to the exact requirements for
the attribution of liability for infringements of a subsidiary to its parent company was also
demonstrated in the Aristrain decision35 where the ECJ had to deal with the attribution of liability in
the case of two sister companies. The Court held that despite the possibility of attributing liability to
another undertaking under the conditions set in its ICI decision36, it is not possible to attribute to a
29
ECJ Case 107/82, AEG-Telefunken AG v Commission [1983] ECR 3151.
ECJ Case C-286/98 P, Stora Kopparbergs Bergslags AB v. Commission, [2000] ECR I-9925, para. 29.
31
Accentuation added by the author.
32
ECJ Case C-286/98 P, ibid, 30f.
33
Joined Cases T-71/03, T-74/03, T-87/03 and T-91/03, Tokai Carbon v. Commission, [2005] ECR II-00010*,
para. 60.
34
Yves Botteman and Laure Atlee „An update on parent liability for antitrust violations of subsidiaries“,
Steptoe’s EU Competition Practice, p.3.
35
Siderurgica Aristrain Madrid SL v Commission of the European Communities (T – 156/94) (1999) E.C.R. II-645
at (141).
36
Case 6/73, Slg. 1974, 223= BeckRS 2004, 73398, recital 37 and 39-41-Istituto Chemioterapico Italiano (ICI) and
Commercial Solvents v. Commission, Judgment of the Court of March 6th 1974.
30
7
company all of the acts of a group, if that company has not been identified as the legal person at the
head of that group with the responsibility of coordinating the group’s activities.
However the ECJ had accepted the Commission’s practice of burdening parent corporations who’s
100% subsidiaries had violated antitrust regulations with the proof that it had in fact not exerted
decisive influence towards these subsidiaries. As stated above however, the scope and dogmatic
explanation of this decisive influence had not been clearly pointed out by the Court and also in
regard to the exemption of agreements from Art 101 TFEU there remain uncertainties as to the exact
scope of this privilege.
After including the Court’s most recent principles on this matter, it is necessary to evaluate its caselaw to disclose these questions in order to assess whether the principles created for the application
of antitrust provisions on corporate groups may be attributed in a consistent way to facts of Art 101
(1) TFEU. This is not only important for dogmatic reasons but of high practical relevance so as to
grant the EC institution’s acts and decisions legal certainty and predictability.
c. The Akzo Nobel Case
On September 10th 2009, the ECJ clarified its case-law through setting up a number of principles in
the Akzo Nobel decision37.
In its appeal before the ECJ, Akzo Nobel relied on the interpretation of the Stora judgment to argue
that the Commission, and subsequently the Court of First Instance, that dismissed Akzo's appeal
against the Commission decision, had applied the wrong legal test in order to determine whether or
not Akzo Nobel's could be held jointly and severally liable for the infringements committed by its
subsidiaries. The Group stated that in its reasoning in the Stora decision the Court had explicitly
clarified that holding a 100% of the shares of its subsidiary would not suffice per se to declare full
liability of the parent, if it is denied, that the latter has exercised decisive influence on the business
conduct of its daughters38.
Apart from clarifying once more that the competition rules concerning affiliated undertakings (which
the Court increasingly put on a level with a single economic entity) the Court stated that:



According to existing case law, the anticompetitive behaviour of a subsidiary can be
legally attributed to its parent corporation, if the former cannot decide
independently on its conduct on the market, but mainly follows the instructions of
the head of the group39, specifically due to the economic, organizational and legal
links that unite the two legal entities.
This is due to the fact, that under these circumstances, the mother corporation and
its subsidiary constitute an economic entity and are thus considered a single
undertaking under competition law.
“In the specific case where a parent company has a 100% shareholding in a subsidiary
which has infringed the Community competition rules, first, the parent company can
exercise a decisive influence over the conduct of the subsidiary and, second, there is a
37
Case C-97/08, Akzo Nobel NV v. Commission, Judgment of the Court on 10 September 2009.
See Europäische Zeitschrift für Wirtschaftsrecht, EuZW, Heft 22/2009, 819, fn 44.
39
See Case C- 6/72, Geigy vs Commission, (1973) ECR I-73395, para.44; Case C- 6/72 Corporation and
Continental Can Co. Inc. v Commission [1973] CMLR. 199 and Stora, see fn 10.
38
8


rebuttable presumption that the parent company does in fact exercise decisive
influence over the conduct of its subsidiary.” 40
Even though the CFI has correctly ascertained that in Stora the Court had mentioned
additional criteria apart from the 100% shareholding criterion, “it is sufficient for the
Commission to prove that the subsidiary is wholly owned by the parent company in
order to presume that the parent exercises a decisive influence over the commercial
policy of the subsidiary”41.
In Stora one had referred to other circumstances “for the sole purpose of identifying
all the elements on which the Court of First Instance had based its reasoning and not
to make the application of the presumption […] subject to the production of
additional indicia relating to the actual exercise of influence by the parent
company”42.
As a result of these principles, the Commission may rely on the presumption without referring to
additional indicia purported to establish that the parent actually exercised decisive influence over the
subsidiary. To rebut this presumption, it is up to the parent company to adduce sufficient evidence
that its subsidiary acts autonomously on the market, in other words, that the parent company and its
subsidiary do not form a “single economic unit”43.
The decision received a lot of attention due to the implications it has on the business conduct on the
parent corporation and the coordination with its subsidiaries. The meaning and implications of the
decision can be described as the following:
Irrebuttable presumption?
First of all, it is necessary to discuss the scope and impact of the presumption of exerting a “decisive
influence” on the market behavior of subsidiaries in the case of a 100% shareholding by the parent
corporation.
Over the years, companies caught by the “Stora presumption” have attempted to rebut it on the
basis of a wide range of arguments, claiming (amongst others):



The parent to be a pure holding company restricted to major and broad financial and
strategic decisions without sufficient operational resources to exercise any influence
on the business conduct of the subsidiaries44;
The reporting to be limited to financial results and forecasts and not to cover the
commercial policy of the subsidiary45;
The parent and the subsidiary to be operating on distinct product markets46;
40
Case C-97/08, Akzo Nobel NV v. Commission, Judgment of the Court on 10 September 2009, para.60.
Case C-97/08, Akzo Nobel NV v. Commission, Judgment of the Court on 10 September 2009, para.61.
42
Case C-97/08, Akzo Nobel NV v. Commission, Judgment of the Court on 10 September 2009, para.62.
43
See Case C-97/08, Akzo Nobel NV v. Commission, Judgment of the Court on 10 September 2009, para. 65.
44
Case T-175/05, Akzo Nobel NV v. Commission, Judgment of the Court of 30 September 2009, paras. 102 –
104; Case T-168/05, Arkema SA v. Commission, Judgment of the Court of 30 September 2009, para. 159.
45
Case T-175/05, Akzo Nobel NV v. Commission, Judgment of the Court of 30 September 2009, paras. 94 – 95;
Case T-168/05, Arkema SA v. Commission, Judgment of the Court of 30 September 2009, para. 53.
46
Case T-168/05, Arkema SA v. Commission, Judgment of the Court of 30 September 2009, para. 53.
41
9

The parent company’s influence not to be exerted in the specific area in which the
infringement occurred47.
All of the above arguments have been rejected by the ECJ48. Thus, it can be argued that proving the
absence of decisive influence is extremely difficult to discharge given the fact that the company has
to provide negative evidence. In reality this means that the presumption of liability of the parent
company for a breach of competition law by its subsidiaries based on capital links, although
(theoretically) a rebuttable one, is now becoming almost impossible to rebut49. This has a number of
consequences not only for the customs and coordination within corporate group but in regards to
certain principles of European cartel law in general .
d. The Single Economic Entity Doctrine: Privileges and Responsibility
There is a consensus in literature on the necessity to somehow consider the existence of an affiliation
when assessing concern-internal restraints of trade. Thus it is generally accepted that Art 101 TFEU is
not applicable on agreements between parent corporations and their (controlled) corporate
subsidiaries in the case that they constitute a single economic entity. It is however almost impossible
to give a structured, systematic account of opinions and views on this intra-enterprise privilege
when regarding the facts of Art 101 (1) TFEU50. The criteria drawn upon seem to depict certain
formulations stated by the Community institutions, often without considering their context. Some of
the most frequently used are:





In the actual case there has been a legally binding instruction by the parent corporation51 ;
In the concrete domain of the agreement, the parent company possesses decisional power
over the subsidiary’s conduct52;
The affiliated undertakings constitute a single economic entity in which the subsidiary has no
decision authority, respectively no economic autonomy53;
The parent corporation holds all or a majority of the subsidiary’s shares and can thus exert a
decisive influence in the decision-making process and business management of the
subsidiary54;
The parent corporation can exercise exclusive control over the undertakings which
participate in the agreement in terms of the EC Merger Control Regulation55;
47
Case T-112/05 Akzo Nobel NV v. Commission, [2007] ECR-II 05049, para. 83.
See Yves Botteman and Laure Atlee “An update on parent liability for antitrust violations of subsidiaries“,
Steptoe’s EU Competition Practice, fn1, p4.
49
See Guillaume Taillandire and Nicola Clark “Parents get the Blame Again- ECJ confirms circumstances in
which a parent company can be held liable for a breach of competition rules by its subsidiaries”, REVIEW: EU,
Competition and Trade, p2. Thus one may even speak of a “probatio diabolica”.
50
See Martin Buntschek, fn 16, 27.
51
Emmerich in: Immenga/Mestmäcker, Art. 85 Abs 1 recital A 51; Koch in Grabitz/Hilf, Art 85 recital. 40.
52
Emmerich in: Immenga/Mestmäcker, Art. 85 Abs 1 recital A 55; Schroeder in: Wiedemann, Handbuch, § 8
recital 5; Müller-Graff in :Heilbronner/Klein/Magiera/Müller-Graff, Art 85 recital 73; Schröter in:
Groeben/Thiesingen/Ehlermann, Art 85 Abs 1 recital 98.
53
Stockenhuber in: Grabitz Hilf, Das Recht der Europäischen Union; Roth/Ackermann in: Frankfurter
Kommentar, Grundfragen Art 81 Abs 1 EG-Vertrag, recital 213.
54
Koch in Grabitz/Hilf, Art 85, Recital 43, ; Roth/Ackermann in: Frankfurter Kommentar, Grundfragen Art 81
Abs 1 EG-Vertrag, recital 194.
48
10

The flow of information between the undertakings in question can be identified as concerninternal information due to the fact that it could have also been passed on in the form of a
legally binding instruction by the parent corporation56.
As stated above, the assessment of these criteria and their dogmatic classification in the context of
the TFEU is of high importance, not only for academic reasons, but because it grants the ECinstitutions’ decisions a certain predictability and verifiability versus the principles of Community law.
There are various forms and reasons for undertakings to affiliate with others under a common
economic conduct and control of a concern. The legal quality and intensity of these alliances depend
on the individual case57. It can be very strong in the case of a directive authority by virtue of an
affiliation agreement, in the case of mere dependency due to a majority share holding, very loose58.
All these factors are to be taken into account when assessing on the one hand the exemption of
internal agreements and decisions from the application of Art 101 TFEU, and on the other the
question of attributing responsibility for illicit conduct of one of the undertakings to another within a
corporate group.
For this reason, the following sequence seems practicable in order to assess the relevance of
corporate agreements for the application of European antitrust provisions, as well as the
accountability of the corporate group for breaches of competition law by one of its undertakings:




First, the identification of a corporate group as a possible subject of antitrust provisions;
Secondly, the evaluation of the nature of the instructions given to the subsidiaries or the
intensity of the exerted control by the management of the parent corporation under
corporate law;
Subsequently, the assessment in which ways this exertion of control determines the
application of (or the exemption from) antitrust provisions; and finally
the assessment of the application of the single economic entity doctrine under the principles
of antitrust law as well as European administrative law in general.
In order to treat equal situations equally and apply legal constructions under consistent
preconditions, it is essential to test them against a common framework in case-law or even against
the facts of the treaty-articles themselves. For this reason, it is essential to evaluate the dogmatic
analysis and reasoning of the Commission as well as the ECJ in previous and recent case-law under
the perspective of common principles of antitrust law59. I will show how the European institutions
have increasingly drawn on the principle of a single economic entity when applying the antitrust
provisions on affiliated undertakings and assess whether this has always been done consistently and
whether the explanations given by the institutions are dogmatically accurate.
55
Schroeder in: Wiedemann, Handbuch des Kartellrechts, § 8 Recital 7; Stockenhuber in: Grabitz Hilf, Das Recht
der Europäischen Union, Art 81 EGV, recital 166; Petra Pohlmann, Unternehmensverbund, 413, 419
56
Porafke, Konzerninterne Vereinbarungen, 235.
57
Cf Meinrad Dreher, Kartellrechtscompliance, ZWeR 1/2004, 75, (101), who only refers to the term of legal
quality.
58
Dreher, ibid, 101.
59
That is, also referring to the practice and case-law of the single member states.
11
In short, the respective facts of Art 101 (1) TFEU against which the construct of a single economic
entity is to be tested against comprise



agreements or concerted practices;
undertakings; as well as
distortions of competition.
All of these facts are to be evaluated whether they constitute an accurate reference for the
consideration of agreements of affiliated undertakings in cartel investigations. While there are
respectable voices in literature in favor of applying the fact of “distortions of competition”, the
Commission and ECJ have increasingly drawn on the term of an “undertaking” when discussing the
application of the single economic entity doctrine. Some authors have even argued, that this
question of a dogmatic classification is not even relevant in practice as all of the possible
explanations suffer from certain deficits, but that the special treatment of corporate groups merely is
accurate for teleologic reasons60.
For the application of the concern-privilege61, the analysis of the practice of the Commission and the
ECJ has shown that the focus of their decisions in all three facts was on the lack of suitability of the
respective agreement to restrict the freedom of competition. In most of the cases the application of
Art 101 (1) TFEU on agreements between undertakings of a corporate group was negated, because
one of the undertakings participating in the agreement lacked the required “autonomy”62 or
“independency”63 as it was “controlled” in some kind by the other corporation64. Therefore the
characteristics defining the feature of control required for the application of the concern-privilege
constitute an essential issue of discussion. It remains debatable whether solely the fact that the
undertakings taking part in the agreement are connected to each other through economic
dependency or the possibility of exerting control is sufficient to rule out a restriction of competition.
For attribution questions there are different perceptions which criteria the institutions should
consider in order to judge which legal person shall be (overall ) responsible and of what nature this
accountability is. The Commission generally proceeds in two steps when dealing with the question of
attributing liability within a concern. After identifying the single economic entity in question, the
authority then assess in a second step which of the legal persons belonging to the entity may be the
final addressee of the penalty.
So far the attribution of liability was subject to the condition of the legal entity in question having
taken part in the breach of competition law or at least exercising65 some sort of control over the
economic conduct of its subsidiaries66. A base for this could be the delegation of administrative
powers on to the subordinated legal entity, for example to an affiliate which took part in the
60
See Koppensteiner, Kartellrecht im Unternehmensverbund, Festschrift FS Mailänder 2004, 136. This view will
be further assessed and criticized in the thesis to follow.
61
(i.e. the application of the intra-enterprise doctrine, exempting agreements between affiliated undertakings
from the application of the European antitrust provisions).
62
ECJ Case 102/77, 23 May 1978, Hoffman La –Roche vs. Centrafarm, ECR- 1974, 1147 et seq.; ECJ Case 30/87,
4 May 1988, Corinne Bodson vs. SA Pompes funèbres des regions libérées, ECR- 1988, 2479, p. 2513, r 19; ECJ
Case 73/95 P, 24 October 1996, ECR-1996, 5495, r 16.
63
See R. Christiani & Nielson, fn 25, OJ 1969, nr 165/12, 14; IV/24055-Kodak, OJ 1970, nr. L 147/24, p.25, r 12.
64
Cf Buntschek, fn 16, 118.
65
Including the possibility to exert, see fn 26.
66
See Koppensteiner, ibid, 137.
12
anticompetitive behavior of the companies involved. The exact criteria (judged again by the notion
of control) to determine whether the parent corporation had participated in the respective breach
are, however, contested.
To solve this legal uncertainty, it has often been expressed that the criteria applied for the concernprivilege should be transferred on to the issue of the question of attributing responsibility67. The
assignment of these criteria should be made, despite a different initial situation, due to the common
reference of a single economic entity applied by the Commission and the ECJ.
In context with recent case-law it is important to note that generally the Commission has to
demonstrate and prove the facts on which it draws for the attribution of conduct to the main parent
company. In the case of holding a 100% share capital this is, as stated above, the other way around.
The corporation held responsible has to provide evidence that it has not exercised its managerial
control despite its majority shareholding.
As it is commonly required for the legal entity held responsible to have somehow participated in the
breach of competition law, different opinions as to whether this refers to active initiation or also
includes “passive toleration” have been articulated. There are reasonable arguments that the
connivance of illegal behavior is sufficient for prosecution, especially if the conduct of the actively
participating affiliate would have otherwise turned out differently. But even though respectable
voices in literature68 believe that solely the cognition of the affiliate’s conduct, which cannot be
considered as an implied approval is not adequate to punish the parent corporation, the Commission
has recently decided differently69.
Because the attribution of liability finds its legal base in Art 23 of the regulation 1/2003 these authors
point out, that in the latter case an actual contribution in the sense of a virtually criminally relevant
behavior of the mother corporation is missing70. Thus the deduction of responsibility solely due to
the delegation of administrative powers should also be denied, because a contribution to the
antitrust breach could not be justified by this form of internal conduct. The advocates of this view
underline their argumentation by declaring that the opposite thesis could not explain why the top
management is – virtually – not held responsible for conduct in which it is neither involved nor
concerned with71. The current practice of the Commission in these cases is said to be inconsistent
and even contradictory.
This reasoning now bears the impasse that the Commission has clarified its case law as to the fact
that at least in the case of a 100% shareholding it does not hesitate to hold the parent responsible for
areas of business that the latter was verifiable not involved in. Also the argument of the missing
contribution to the anticompetitive conduct is not as simple and plausible as it seems at first sight,
67
Cf Emmerich in Immenga/Mestmäcker EG-Wettbewerbsrecht I (1997) Art 85 Art 1, recital 61;
See Koppensteiner, fn 45, 138; Emmerich in Immenga/Mestmäcker, EG-Wettbewerbsrecht I (1997) Art 85 Art
1, Recital 51; Mestmäcker/Schweitzer, Europäisches Wettbewerbsrecht, 2. Aufl. (2004), 236f; Michael
Holoubeck and Michael Potacs (Hrsg.) Öffentliches Wirtschaftsrecht, Bd I, Springer Verlag, 647ff; Menz
„Wirtschaftliche Einheit und Kartellverbot“, Duncker & Humblot, 1. Auflage, 2004.
69
Cf the above outlined case-law especially the Akzo Nobel decision by the ECJ which has affirmed the
Commission’s standpoint.
70
Cf Koppensteiner, fn 45, 138.
71
See Koppensteiner, fn 45, 138.
68
13
because even according to company law the head of the concern may be responsible for the lack of a
general supervision of its companies conduct72.
To solve this dilemma some authors have pointed out that a distinct approach allowing a more
differentiated view should be applied73. This reasoning draws on an issue which has long been
discussed in (general) corporate law: how should the law structure the responsibility of corporations
for illicit conduct of their subsidiaries and employees74? In many areas of law, particularly in criminal
law, legislators have acted to reform corporate liability regimes, turning from the principle of strict
vicarious liability to methods that reduce or eliminate sanctions when principals act to deter
wrongdoing75. The reasoning of this approach is that a corporate group merely has one
organizational instrument at hand to anticipate infringements of its employees: Compliance76.
Therefore the assessment whether the group’s management had adhered to its specific supervisory
obligations in antitrust law and subsequent sanctioning in the negative case, should attribute to a
form of corporate negligence. Thus a parent company attends to its duty of a convenient
management only in the case that it designs and implements practicable methods of supervision,
that are furthermore in line with the managements’ obligations (and limitations) of corporate law
and which serves the detection and prevention of illicit conduct. How the reference for antitrust
litigations under European cartel law to such a base of internal governance could be achieved and
whether it is appropriate for the purposes of antitrust law, will be the focus of the second part of my
thesis.
Concerning the issue of considering the criteria of assessment used for the intra-enterprise privilege
to constitute a “two-side medal” in connection with the question of attributing liability, recent case
law would have given the ECJ the chance of clarifying the legal base and appropriateness of this
assumption, as well as specifying the reference of economic independence. However, the Court has
not done so satisfactorily77, still leaving room for discussion. After assessing the classification of the
criteria of the intra-enterprise privilege in the previous section, I will discuss whether it is appropriate
to apply these principles to the issue of attributing liability within a concern.
Finally it is interesting to note that the liability of a parent corporation for antitrust infringements
committed by one of its subsidiaries is dogmatically not a liability for an external breach of a different
legal entity, but a responsibility for its genuine culpability as head of the group78. Therefore it has
72
This could even be held equal with a contribution by omission under European administrative law.
See Karl Hofstetter and Melanie Ludescher, „Der Konzern als Adressat von Bussen im EU-Kartellrecht“,
http://www.rwi.uzh.ch/lehreforschung/tp/tit-hofstetter/person/FS-von-Bueren-EU-Kartellbussenrecht-Mai2009.pdf. ; Wolfgang Bosch, Birgit Colbus, Antonia Harbusch, „Berücksichtigung von Compliance-Programmen
in Kartellbußgeldverfahren“, WuW 7 u 8/2009, 740.
74
Cf Jennifer Arlen, Reinier Kraakman, „Controlling Corporate Misconduct: An Analysis of Corporate Liability
Regimes“, New York Law Review Vol.72, Nr 4, 1997. Although the main attention of this and related articles in
this particular field focus on criminal law, the principles drawn out in the article may, in a slightly changed
context, comply the purposes of antitrust law, which in some jurisdictions (though not the European Union)
can be prosecuted under criminal law.
75
See Arlen and Kraakmann, ibid, 4.
76
Hofstetter and Ludescher, fn 70, 496.
77
Cf Peter Sander, Das Konzernprivileg im Europäischen und Österreichischen Wettbewerbsrecht, OZK 2008, 20
(27); Yves Botteman and Laure Atlee „An update on parent liability for antitrust violations of subsidiaries“,
Steptoe’s EU Competition Practice, 5.
78
See Michael Kling, “ Die Haftung der Konzernmutter für Kartellverstöße ihrer Tochterunternehmen”, WRP
2010, 506.
73
14
been argued that holding 100% of the shares of a subsidiary cannot per se constitute the
accountability of this parent, neither can a minority investment free the parent from liability. It will
be assessed that such a form of accessory liability is not known to European antitrust law and falls
out of the concept of corporate liability which has been exercised in the Member States during the
last two decades. Thus it will be evaluated how far-reaching the parent corporations’ duty of
supervision for illicit conduct of a wholly possessed subsidiary can be assumed to be, especially in the
case that the parent company does not actively exercise decisive influence over the subsidiaries’
conduct.
Commercial Agents: Producers do not necessarily engage controlled subsidiaries for the sale and
distribution of their products79. They may also engage a commercial agent for the purpose of selling
their goods or enhancing the allocation of their products. Agency agreements cover the situation in
which a legal or physical person (the agent) is vested with the power to negotiate and/or conclude
contracts on behalf of another person (the principal), either in the agents own name or in the name
of the principal, for the


Purchase of goods or services by the principal, or
Sale of goods or services supplied by the principal.”80
The Commission has concerned itself with the assessment of agency agreements for the purposes of
antitrust law for over forty years now81, especially in relation to which extent Art 101 (1) TFEU is
applicable to agreements between commercial agents and their principals. This is of vital importance
for the principal with regard to the possibility of including a non-competition clause and restraining
the activity of his agents to a certain area82.
In its communication of December 24th 196283 the Commission clarified that Art 101 (Ex Art 85 TEU)
is principally not applicable to the contractual relationship between commercial agents and their
principals84. The reason for this is that commercial agents merely perform an auxiliary function in the
sale and distribution of products. They are included in the organization of their principal through a
contractual assignment and thus dependant on the instructions of the latter85. This separates the
agent from an authorized dealer who trades on the market in his own name, bearing the financial
risk of his transactions. Contracts of undertakings with these independent dealers are thus assessed
to constitute non-genuine agency agreements. The decisive criteria of distinction formulated by the
Commission is the exclusive or tacit acceptance of the financial risk in context with the sale and
distribution of goods.
Decisive for the term of a genuine agent is further a functional distinction86. Notably the following
functions are attributed to an independent dealer:

the storage of goods in his property;
79
Cf Wiedemann, fn 55, § 10, recital 1.
Commentary on the Commission Guidelines for vertical agreements, r 12.
81
See Andreas Lotze, Handelsvertreter-und Kartellrecht,
http://www.aulinger.eu/pdfs/mandantenbriefe/Mandanteninformation_September_2008.pdf.
82
See Lotze, ibid.
83
Official Journal, 2922/62.
84
Thomas Kapp, Wuw 10/1990, 814 (815).
85
Cf Kirchhoff in Wiedemann, fn 55, §10, recital 4.
86
Kirchhoff, ibid, recital 6.
80
15


the establishment of a shop where services are offered to customers; as well as
the autonomous fixation of prices and conditions towards customers87.
Nevertheless the Commission explicitly stated that agents are independently active on a market for
the supply of services, namely the services of an agent. Therefore possibly occurring horizontal
agreements between the agents competing on this market for services are to be strictly separated
from any agreement with principals.
According to the Commission’s communication, explicitly acceptable parts of an agreement between
a principal and an agent, apart from the setting of prices and business conditions, are the restriction
of the commercial agent to a certain area as well as the exclusive obligation towards the principal88.
Other agreements are to be examined whether they originate from the mutual duty of protection of
interests, in which case they are covered by the privilege.
The ECJ initially confirmed the Commissions line of argumentation. However, the Court emphasized a
different criterion as the main point of distinction of genuine from non-genuine agency agreements.
In order to exempt these contracts from antitrust law, the court held that an incorporation of the
agent into the sales and distribution of the main undertaking was a necessary precondition89. This
has been criticized in literature for several reasons.
First of all it was in question whether this precondition could be fulfilled by agents operating for
more than one or even several principals. Furthermore it was disapproved of the fact that the Court
had moved from predictable and comprehensible substantive criteria such as the allocation of risk to
an adjective point of view which does not allow an assessment on a case to case basis using a
functional approach.
By now it is settled case- law that the privilege of being exempted from the application of Art 101
TFEU must also apply to agents working for several principals, at least in the case that they fulfill
tasks typical for a genuine agent and can thus be distinguished from an independent dealer90. This is
due to the fact that a more rigorous restriction of agents representing several principals versus
agents only representing one principal would be inconsequent regarding the principles of antitrust
law91. It would, amongst other things, enhance a stronger vertical integration which the Commission
is seeking to avoid92.
Thus in order to grant a treatment of commercial agents in harmony with other principles of antitrust
law, the following approach seems appropriate: After distinguishing vertical from horizontal
agreements93, the existence of a genuine agency agreement is to be determined for the vertical level.
This is to be done using the criterion of the allocation of risk and responsibility borne by the
87
Furthermore, according to the Commission’s Communication, it is compatible with the function of a
(genuine) commercial agent that he takes over the risk of the deal contracted for his principal (provision for
doubtful debts).
88
Requiring of course the approval of the respective agent. Cf Kirchhoff in Wiedemann, fn 48, § 10, recital 8.
89
Case T- 166/66, Italy vs. European Commission (1966), 457.
90
This distinction is to be made, as mentioned above, using a functional approach, thus regarding restrictions
immanent for agency agreements; See Kirchhoff in Wiedemann, fn 48, §10, Recital 14; Kapp, fn 68, 820.
91
See Lotze, fn 65, 6.
92
Especially considering the Commission’s effort of eliminating this feature in certain market sectors, for
example the automobile sector.
93
-the latter may not claim the exemption from the interdiction of anticompetitive agreements-
16
contractors. It is to be assessed whether the concerned agent bears a considerable risk in the deal
and can thus be judged to constitute a self-contained undertaking. It is to be investigated whether
this assessment of the precondition of not assuming the risk of the operation can or should be done
along the same lines as determining whether a subsidiaries conduct can be influenced by the parent
corporation by the means of exercising a decisive influence. Otherwise the criteria of the intraenterprise privilege, exempting the agreements with dependant subsidiaries, would not be applied
consistently throughout European Antitrust law.
If the conclusion of this assessment is that the agreement to be investigated was reached between a
principal and a genuine commercial agent, then the respective restrictions are to be evaluated
whether they can be seen as immanent to the agreement. All restrictions going beyond the duty of
securing the interests of the principal (in respect to the area of activity with which the agent has
been consigned) are not exempted from the application of Art 101 (1) TFEU94.
Assessing the issue of commercial agents in European Antitrust law, I will furthermore argue why the
pre-condition of the agents incorporation into the business organization of the principle, still upheld
by the ECJ, is void and why conversely the criterion of the allocation of risk harmonizes better with
the parallel assessment of subsidiary agreements. This is of utmost importance in context with the
issue of a “two-sided” medal outlined above, in the sense whether the “treat” of being exempted
from antitrust interdictions comes along with the accessory attribution of conduct95.
The final issue referring to concept of a single economic entity is the problem of a succession or
acquisition of undertakings. A legal or organizational transformation of an (economic) entity, which
has breached competition law, does not mean that a new undertaking, free from liability of its
predecessor is created96. Rather, it is to be assessed to whom the collective responsibility for this
new establishment can be attributed, using an economic point of view. If the outcome is that
economic identity can be assumed between the previous and the new entity, then the latter can be
made fully accountable for the conduct of its predecessor97. An undertaking should not have the
chance to rid itself of its responsibility just because the legal person responsible at the time of the
breach does not exist anymore98. Thus, even if the targeted firm has reorganized itself long before
the purchase, the acquirer must still be attentive to its past behavior in order to ensure not to
encounter unwelcome surprises later.
The same holds true for the acquisition of an undertaking. If an undertaking is purchased, the assets
and liabilities, including the responsibility for possible breaches, merge with those of the acquirer99.
As long as the legal person which has managed the corporation at the time of the breach still exists,
94
See Kapp, fn 68, 820. This part of evaluation will include the issues of provisions for doubtful debts, the
transfer of the agents commission-, as well as the offering of further services to the clients.
95
(We will see that also for this case a differentiated approach is more appropriate and therefore desirable.)
96
Case T-29/83 & 30/83, CRAM und Rheinzinke vs. Commission, Judgment of the Court 1984, para. 9.
97
See Christina Hummer, “Kartellrechtliche Haftung von Muttergesellschaften”, ecolex 2010, 64 (65).
98
Case T- 305/94 ao, Limburgse Vinyl Maatschappij and others versus European Commission, [1999] II-931, at
para. 961 and 984 (LVM).
99
See Hummer, ibid, 65.
17
it is fully liable for the illicit behavior, even if the material and personal factors constituting a part of
this have passed onto a third party100.
According to previously settled case law the purchaser is furthermore not accountable for breaches
of the acquired undertaking for the time before the acquisition, as long as the respective company
maintains its own legal personality101. In the case that shortly after the acquisition an antitrust
inquiry was induced, the parent corporation had not been held responsible, which was justified by
the short amount of time available to the head of the group for analyzing and gaining control over
the policy of the subsidiary. This line of argumentation no longer complies with the principles of
recent case law102, and it has been brought forward that companies will therefore see themselves
confronted with a much stricter assessment of responsibility, as at least in the case of a 100%
shareholding the ECJ confirmed the company’s accountability for previous breaches of the acquired
subsidiary103.
As no one wishes to “buy responsibility”, companies will now sharpen their criteria for a purchase. In
practice the acquirer will rarely know in advance, if its target firm is or was involved in a cartel104. A
“classical” due diligence review will regularly not suffice to unravel covert price-fixing arrangements
in which the targeted undertaking has participated105. In this area it is doubtful whether even already
implemented measures of compliance106 will produce sufficient incentives for employees to inform
their (potential) new management of anticompetitive business practices. Therefore, it seems
reasonable for companies in the future, to subject their object of purchase to an internal antitrust
review to avoid the hazard of being confronted with a fine for competition law infringements107.
Should, in the course of the internal review, the company be caught to have committed an
infringement, a leniency note will be prepared to avoid a penalty. After discussing the relevant case
law of this issue, I will discuss which factors this internal review should include and how it should be
part of the Commissions assessment procedure in the case of undiscovered illicit behavior prior to
the acquisition.
III.
The Concept of Corporate Liability in European Antitrust Law
a. The Responsibility of Subsidiaries for Antitrust Breaches
The second large part of my dissertation will assess how the principles set out in the Akzo Nobel case
fit into a fault-based concept of corporate accountability in antitrust law. According to Art. 23
paragraph 2 of the Regulation 1/2003 the Commission may (by decision) impose fines on
100
Christina Hummer, ibid, 65; Case T-327/94, SCA Holding vs European Commission, [1998] II-1373, recital 63,
confirmed by C- 297/98 P, SCA Holding vs Commission, [2000] I-10101, recital 25.
101
Case T- 161/05 Hoechst vs European Commission, r 74ff.
102
See above, point I c of this outline.
103
Cf Rechtsprechung zum Wettbewerbs- und Kartellrecht, EG Art 81; Vo 1/2003, Art.23, ZIP 8/2010, r 61.
104
See Christina Hummer „Mütter in kartellrechtlicher Ziehung“, die Presse, Rechtspanorama- 5.10.2009,
Steuern und Wirtschaft.
105
It can be assumed that in respective negotiations a manager will not voluntarily reveal that his business has
been connected with illegal antitrust practices, as far as he knows about this himself. See fn 32.
106
See below.
107
Multinational firms, that already possess a fair deal of cartel law experience, and do not want to run the risk
of being caught as recidivist, apply this already today.
18
undertakings and associations of undertakings where, either intentionally or negligently, they
infringe Art. 101 or Art. 102 of the Treaty108. Thus, in order for a company to be held accountable for
an antitrust breach it must have, apart from objectively violating the cited articles, acted in a
culpable way. This fault-based approach requires personal and comprehensible responsibility of the
contracting legal person.
The antitrust provisions of European law are addressed to agreements of undertakings and decisions
of associations of undertakings109. In a corporate group however, several legal persons constitute
separate legal entities and thus the term of an undertaking is not sufficient for perceiving the legal
person(s) which can be made directly responsible for the committed breach of competition law110. It
is in fact necessary to substantiate this term in regard to the respective legal entity. Is the
responsibility of the subsidiary as a separate legal entity apparent, then in a second step it is to be
ascertained whether and under which criteria this responsibility can be attributed to the parent
corporation111.
The distinction between associations of undertakings and corporate groups or concerns are not
entirely clear112. It has been propagated in literature that this classification should (again) be made
along the line of the single economic entity doctrine. One will have to differentiate: in the case that a
concern constitutes a single economic entity, it can no longer be qualified as an association of
undertakings for the purpose of EC antitrust law 113. If, on the other hand, the Commission is
confronted with a loose association of undertakings, in which its subsidiaries still dispose of
economic freedom, the principles of corporate groups discussed here are not pertinent as
agreements between these undertakings need always be tested against Art 101 (1) TFEU. The
question of identifying whether the considered corporate group constitutes a single economic entity,
must again be answered referring to the appropriate criterion in connection with the notion of
control discussed above114.
b. Corporate/Organizational negligence
As indicated above, decisions in European antitrust law must be compatible with the fault based
approach of corporate liability115. Legal persons act through their organizational bodies116. The
question of attributing these acts of decision-making to the undertaking they are representing has
always been a debated issue in corporate law. In the case that a part of the managing board of a
108
Karl Hofstetter and Melanie Ludescher, fn 52, 495; Mestmäcker/Schweitzer, Europäisches
Wettbewerbsrecht, Baden Verlag, München 2004, 2. Auflage, §21, recital 17.
109
Art 101 TFEU; Mestmäcker/Schweitzer, ibid , Art 81, recital 1; Immenga/Mestmäcker, EG-Wettbewerbsrecht
Bd I, München 1997, Art 85, recital 35. Note that it is necessary to differentiate between the term of
associations of undertakings in European antitrust law and judging whether legally separate entities of a
corporate group are economically associated.
110
Hofstetter and Ludescher, fn 52, 494.
111
Cf Karl Hofstetter and Melanie Ludescher, fn 52, 495. For the criteria for this attribution, see above. In order
to give a general outline of the determination of a subsidiary in a first step, the antitrust provisions considering
affiliated undertakings will be evaluated.
112
Gleiss/Hirsch Art 85, Recital 70; Schröter in Groeben/Thiesingen/Ehlermann Art 85 I, recital 17.
113
- as it may be an addressee of the antitrust provisions itself-; Emmerich in Immenga/Mestmäcker, fn 91, r38.
114
See point 2.2.2 in the table of contents.
115
th
Art 23 Abs 2 of Regulations 1/2003; OJ Nr. 1 of January 4 2003.
116
Mestmäcker/Schweitzer, fn 91, §21, r 14.
19
subsidiary commits a breach of European Antitrust law, the unlawful conduct can-primarily-be
attributed to the subsidiary without further ado117. The necessity to attribute individual conduct to
an undertaking is derived from the its managerial division of duties and responsibilities118. More
difficult to assess are cases in which the subsidiaries’ organizational bodies neither commit
infringements themselves nor have knowledge of (potentially) infringing activities by their
employees. In this case one has to consider whether the management of the subsidiary can be held
responsible for neglecting duties of organizational supervision119. Accordingly, it is to be debated
whether the same line of argumentation should apply to the relationship between subsidiaries and
the entire group, especially considering the implementation or existence of specific antitrust
compliance programs.
This last point, however, confronts parent companies with a dilemma. On the one hand, they should
be very attentive to their subsidiaries’ activities120. They may need to take steps to ensure increased
oversight , such as implementing (international) compliance programs throughout the group,
preventing anti-competitive behavior from arising in the first place. But, despite all those efforts, if
only one of their subsidiaries is found to have infringed antitrust rules, they will be trapped by the
presumption set out in the Akzo Nobel-case, due to the fact that they actually exercised (decisive)
influence to secure compliance with EC competition rules121. Therefore, the now broadened
presumption of responsibility for antitrust breaches in a group raises the question whether it may
not be, in certain circumstances, running counter the deterrence objective.
I will argue that the above stated precondition of attributing individual conduct to undertakings in
the case of organizational negligence122, also holds true for the specific feature of a single economic
entity. This is due to the fact that it cannot be the individual addressee of the penalty, which in fact
has to be addressed to a legal person123. In respect to these cases, Community Law empowers the
Commission to decide on the basis of procedural convenience124. But precisely this practice of the
Commission of using the doctrine of a “single economic entity” as main reference for questions of
attribution in antitrust law can be disapproved of.
The European litigation procedure in antitrust matters has been criticized for being constitutionally
doubtful125 for the following reasons: first, the Treaty provisions for setting fines in antitrust cases
have, despite a substantive change in the assessment, not been changed since the beginning. And
secondly, for the reason of not appropriately regarding the requirement of a correct balance
between the necessity of effective enforcement of antitrust law and ensuring legitimate rights for
defense and recovery by the undertaking concerned. This identifies the two issues of concern,
117
Hofstetter and Ludescher, fn 52, 495.
Mestmäcker/Schweitzer, fn 21, § 21, r 18.
119
Cf Karl Hofstetter and Melanie Ludescher, fn 52, 495; On the level of an undertaking the attribution is always
based on an organizational deficiency, see Mestmäcker/Schweitzer, fn 21, § 21, Recital 18; Vito Roberto, Martin
Petrin, Organisationsverschulden aus zivilrechtlicher Sicht in: M.A. Niggli/Marc Amstutz (ed.),
Verantwortlichkeit im Unternehmen: Zivil- und strafrechtliche Perspektiven, Basel 2007, 77.
120
See Yves Botteman and Laure Atlee, fn 5, conclusion.
121
See Yves Botteman and Laure Atlee, fn 5, ibid.
122
When exactly this is the case will be assessed under point 3.2. of the dissertation.
123
Cf Mestmäcker/Schweitzer, fn 21, § 21, recital 14; Case T- 305/94 ao, Limburgse Vinyl Maatschappij and
others versus European Commission, [1999] II-931.
124
Mestmäcker/Schweitzer, fn 21, ibid.
125
Jürgen Schwarze, Rechtsstaatliche Defizite des europäischen Kartellbußgeldfverfahrens, WuW 1/2009, 6f.
118
20
namely that the normative base for imposing fines lacks of substantiation and that in accordance
with the principles lain out by the ECtHR126 the fixation of penalties in antitrust cases is required to
comply with the procedural principles of criminal law127. Due to the Court’s expressive requirement
of a substantive approach for fining companies, the principle of legal determination must also hold
true for penalty decisions in European antitrust law128.
Such a substantive and established legal provision, regarding the predictability and possibility of a
substantive subsequent review of the Commission’s decision, is lacking in the Treaty’s current
system. Art 23 of the regulation 1/2003 is considered too rudimentary as a base for the fault-based
approach in antitrust procedures and solely articulates two criteria to determine the wide-ranging
framework for the fining of undertakings: the severity and duration of the infringement129. Therefore
it has been requested for the European legislator to enact respective substantiated provisions and as
the practical handling of this cannot be left to the administrative guidelines published by the
Commission for setting fines in antitrust cases130. Additionally the extensive discretionary powers of
the Commission under the current framework are further sustained by the ECJ’s view, assessing the
summary proceedings of antitrust law to constitute a special form of administrative procedure . This
is manifested in the Courts reservation towards a substantive assessment of the Commission’s
decision.
Furthermore the current regime does not precisely distinguish between legal discretion and legal
assessment which complicates the judicial review considerably131. The Commission is given a very
extensive range of distinction in its penalty assessment. The ECJ has stated that the Court itself is
limited to judge whether the Commission had adhered to procedural rules and principles, whether
the facts of the case have been appropriately ascertained and whether there had not been an
obvious mistake in the assessment and use of discretion132. Thus the second required change in the
current system would be the (constitutional) guarantee of a comprehensive133 judicial review as well
as a subsequent modification of the Commission’s guidelines according to a substantive legal
parameter134.
It is finally interesting to note that the Commission has experienced a downright shift in opinion in its
case-law regarding the assessment of corporate groups for the purposes of imposing fines135.
126
European Court of Human Rights.
The Court ruled that due to the excessive amount of the fines, they had at any case assumed a character
similar to criminal law and should therefore be assessed on the basis of the principles of criminal law, ECtHR,
st
dec. of febuary 21 1984, ref.nr. 58544/79, Öztürk/Germany, NJW 1985, 1273, recital 56; see Frowein/Peukert,
EMRK-Kommentar, 2. Aufl. 1996, Art 6, recital 39.
128
See Schwarze, fn 112, 8; ECtHR, judgment of 22 March 2001, ref.nr. 34044/96, 35532/97, 44801/98,
Streletz; Kessler, Krenz/Deutschland, NJW 2001, p. 3035.
129
Cf Schwarze, fn 112, 7.
130
See: study of Jürgen Schwarze, Rainer Berchtold and Wolfgang Bosch, Deficiencies in European Community
Competition Law: critical analysis of the current practice and proposals for change, Gleiss Lutz Rechtsanwälte,
September 2008, www.gleisslutz.com.
131
See Rainer Berchtold, KOMMENTAR Zum Ermessen der Kommission in Bußgeldverfahren, WuW 10/2009,
1115.
132
See Berchtold, ibid. Precisely this however is controversial in the Commission’s attitude to evaluate
complicated economic facts in the light of the legal requirements of Art 23 of the regulation 1/2003; see below.
133
Meaning in compliance with Art 6 ECHR in its entirety (regarding substantive as well as adjective criteria).
134
Precisely what this adjustment towards a more substantive approach should comprehend, will be discussed
under the following point c.
135
See Wolfgang Bosch, Birgit Colbus, Antonia Harbusch, fn 59, 744;
127
21
Originally the Commission did take consideration of the adoption of compliance-measures by the
respective enterprises, if these measures had been taken before the revelation and official pursuit of
the corporation concerned136. In the past years however the Commission has explicitly dismissed this
view, in the case of British sugar even evaluating the internal program as an additionally aggravating
factor137. Instead of a substantive approach considering the internal management and regarding
economic conditions, the Commission has now moved to a strictly adjective view138, making
extensive (even alienated) use of the single economic entity for imposing penalties on corporate
groups. This line of procedural conduct creates an accessory liability139, previously unknown to
European antitrust law and neglecting the economic rationale of creating a concern.
c. An Economic Approach of Determining Liability via “Best Practice
Compliance”
Regarding the current unsatisfactory base of reference, voices in literature have pledged for a more
economical assessment of imposing antitrust fines, particularly suggesting to include certain forms of
reviewing parents’ companies supervision duties by the means of compliance measures throughout
the corporate group140.
This claim for “a more economic approach” has been criticized due to the fact that the
implementation of economic models and methods of analysis require their conformity with the
community’s given normative rules and statutes141. This line of argumentation however, oversees
that the adoption of an “economic approach” is merely a recognition of the fact that economic
considerations are part of the assessment of appropriate considerations of individual cases142.
Legal compliance can be defined as the systematic concept to ensure that an organization’s conduct
adheres to the relevant laws, regulations and business rules as a manifestation of organizational due
diligence in the context of corporate management143. An effective compliance program should
systematically supervise, instruct and when indicated sanction the conduct of its employees in order
136
Case T-77/92, Parker Pen v Commission, 14.07.1994. Celex No. 692A0043; Commission Case IV/32.725 °
Viho/Parker Pen ° OJ 1992 L 233/27, recital 24; Commission Case IV/32.879 - Viho/Toshiba, OJ 1991 L287/39,
recital 28.
137
Commission Case IV/30.178- Napier Brown/British Sugar, L 284/41, recital 86; It has to be stated however
that British Sugar had violated EC competition law a second time. Therefore the assessment of this case is
rather to be seen under the perspective of wanting to solely punish British Sugar as recidivist and and cannot
be regarded as a precedent (See Bosch, Colbus, Harbusch, fn 59, 744).
138
Commission Cases: C – 36.545/F3 - Aminosäuren, 07.06.2001, L 152/24, recital 312; C- 38.359 –
Elektronische und mechanische Kohlenstoff- und Graphitprodukte, recital 313.
139
See the outlining of this issue above; Michael Kling, “Die Haftung der Konzernmutter für Kartellverstöße
ihrer Tochterunternehmen”, WRP 2010, 506.
140
Karl Hofstetter, „Sachgerechte Haftungsregeln für multinationale Konzerne: Zur zivilrechtlichen
Verantwortlichkeit von Muttergesellschaften im Kontext internationaler Märkte“, Tübingen 1995; Wolfgang
Bosch, Birgit Colbus, Antonia Harbusch, fn 59.
141
See Tagungsbericht des Max-Planck-Instituts für Geistiges Eigentum, Wettbewerbs- und Steuerrecht, WuW
7 u. 8/2009, 767f, Joachim Bornkamm.
142
Dirk Schroeder, ibid, 769.
143
th
Cf Creifelds, Rechtswörterbuch, 19 edition 2007, 251 (translated);
http://www.nmsbvi.k12.nm.us/Records/records_def.htm.
22
to ensure its lawfulness 144. The reasons of undertakings to undergo these efforts may either be the
prevention of statutory breaches or even a legal duty145. Unlike the Commission, the consideration
of companies efforts to implement compliance programs for the purpose of complying with
obligations of corporate law (and even antitrust law) has nevertheless been recognized in the
Member States themselves146.
According to § 81 of the German antitrust code147 in conjunction with the law against administrative
offense148 undertakings themselves may only be held liable for breaches of competition law if either
one of their managers (or other persons who are entitled to represent the respective undertaking)
have infringed anticompetitive statutes or the undertaking has intentionally or negligently
disregarded its supervisory duties149. The company may free itself from responsibility in the case that
it is able to prove to have done everything at its managerial power of effective supervision to impede
the unlawful behavior of its employee. According to the prevailing but contended opinion, the same
reference is to be used for the relation between parent corporations and their subsidiaries150.
Unfortunately the German antitrust authorities had found themselves obliged to harmonize the
penalty regime of § 81 GWB with the European Case law and added as upper limit of the penalty
regulation the total volume of sales of all as “a single economic entity” operating natural and legal
persons151.
Furthermore in assuming this negative attitude versus the consideration of compliance programs, the
Commission misconceives their preventive value152. A Compliance program is the sole organizational
measure for undertakings at hand to anticipate breaches of antitrust law by one of its employees153.
Even if a breach occurs despite the program , it may nevertheless enhance the verge of inhibition and
furthermore document the management’s intention to comply with its duties of regulation and
supervision154. Despite the fact that no compliance program can guarantee a complete elimination of
breaches, it does create certain structures that on the one hand constrict the freedom of employees
for illicit conduct and on the other detect committed infringements of antitrust regulations
144
See Bosch, Colbus and Harbusch, fn 59, 740 (translated).
A good example for this ist he Sarbanes Oxely-Act, that obliges corporations to implement compliance
programmes in context with activities on the capital-market, See Bosch, Colbus and Harbusch, fn 59, 741; but
also in Germany (§ 33 para. 1 WpHG, for dealing with securities).
146
See Bosch, Colbus and Harbusch, ibid, as well as § 102 paragraph 2 of the Swiss Criminal Code (a NonMember of course).
147
GWB (Gesetz gegen Wettbewerbsbeschränkungen)
148
OWiG (Gesetz über Ordnungswidrigkeiten).
149
rd
Bosch, Colbus and Harbusch, fn 59, 742; Rogall in Karlsruher Kommentar, Ordnungswidrigkeitsgesetz, 3
edition 2006, §130, recital 108f.
150
Deliberatly unsettled by the BGH in 1981- KRB 3/79- Transportbeton-Vertrieb, WuW/E 1871, 1876;
approvingly Rogall, ibid, §130, recital 25, depreciative/dismissive König in Göhler, OWiG, 14th edition, 2006,
§130, recital 26; differentiated Dreher, Kartellrechtscompliance, ZWeR 2004, 75.
151
See Martin Buntschek, KOMMENTAR in WuW 7 u 8/2009, 990. Again this leads to substantial legal
uncertainty due to the dogmatic uncertainties that go along with the single economic entity doctrine (see the
above point I d considering attribution questions). Regarding the consequences for German company law see:
Martin Buntschek, § 81 Abs 4 GWB n.F.- die geänderte Obergrenze für Unternehmensgeldbußen, WuW 9/2008,
941.
152
Bosch, Colbus and Harbusch, fn 59, 745.
153
See above (point I d of this outline); Karl Hofstetter and Melanie Ludescher, fn 52, 496.
154
See Mooshammer, Die neuen Leitlinien der Europäischen Kommission zur Festsetzung von Kartellbußen,
wistra 2007, 94.
145
23
precociously and remedy the defects155. The Commission’s view that the implementation of
respective compliance programs could not hinder the breach from occurring is a too global
statement.
Beside the addressed issue of dogmatic inconvenience in equalizing corporate groups with a single
economic entity 156, the Commission should adjust its view towards a more economically rational
analysis for yet another reason. The denial of considering compliance regimes leads to a
contradiction in valuation with regards to the leniency program of the Commission157. Both on the
national as well as the community level, undertakings may profit of the fact of being exempted from
the penalty for infringements of antitrust provisions in which they had participated, provided that
they cooperate with the authorities. This program can be drawn on despite the fact that the
respective corporation’s endeavors to ensure its conduct is otherwise in line with law or whether
inversely, it has not made the effort of investigating in particular programs of this kind. Decisive is
solely how rapidly and comprehensively the Commission is provided with the required documents
and records158. The current handling of this procedure is furthermore in conflict with the
presumption of innocence as a guarantee of criminal law159, as the leniency program triggers a de
facto constraint to self-incrimination in the face of the impeding race for a preferably large reduction
(or exemption) of the fines160. This situation makes it for the concerned undertaking extremely
difficult to acquire an overview of the allegations which impedes a systematic adoption of legitimate
measures of defense161. It has therefore been brought forward that these procedural measures
would at most be constitutionally acceptable in the case that they are bound to a clear and distinct
legal basis, considering the presumption of innocence and are free of a de-facto constraint of selfincrimination162.
The current leniency program however does not only ignore compliance programs it positively
discriminates them163. For the majority of (internal) compliance regimes, employees face serious
consequences in the case of participating in a cartel or breaching antitrust law elsewise164. This is
why it is especially difficult for undertakings with effective compliance measures to gather the
necessary information and persuade their members of staff to collaborate in order to detect the illicit
conduct despite the possible reprimand. But without the cooperation of its workforce the
undertaking finds itself in an inferior position compared to that of undertakings without respective
programs which is why, under the current praxis, these corporations are being punished twofold165.
155
Bosch, Colbus and Harbusch, fn 59, 745.
See above point I d of this outline.
157
Bosch, Colbus and Harbusch, fn 59, 746.
158
Bosch, Colbus and Harbusch, ibid.
159
For this necessity see above point b.
160
Cf Jürgen Schwarze, fn 112, 10; See study of Jürgen Schwarze, Rainer Berchtold and Wolfgang Bosch, fn 123.
160
Reversely the concerned undertaking sees itself obliged to attest the untruthfulness of the allegations,
which inverts procedural principles.
161
Reversely the concerned undertaking sees itself obliged to attest the untruthfulness of the allegations,
which inverts procedural principles; see Jürgen Schwarze, fn 112, 10.
162
Cf Schwarze, ibid.
163
Bosch, Colbus and Harbusch, fn 59, 746.
164
Dreher, Kartellrechtscompliance, fn 142, 100; and see analysis below (-employees may face disciplinary
measures, a claim for damages or even be suspended).
165
Bosch, Colbus and Harbusch, fn 59, 746.
156
24
Regarding their preventive value, the efforts of the undertakings concerned to comply with the rule
of law, as well as the possibility to determine in a comprehensible and traceable the criteria used for
the exact amount and means of calculation of fines, it seems reasonable and desirable for the
Commission to change its view. After assessing the situations in which a subsidiary alone should be
held responsible166 as well as the necessity for the consideration of compliance measures in general, I
will ascertain which valuable criteria the precise design and formation of compliance programs has
for the Commission. It can respectively serve as a means to govern and steer the conduct of
undertakings, insuring compliance with European antitrust regulations. That this would well be
consistent with the Commission’s discretionary authority granted to it by the Court can be
demonstrated in the statement of the ECJ emphasizing not only the Commission’s supervisory duty
of undertakings, but also the Commission’s competence to “steer and govern” the conduct of
companies in the sense of the competition principles of the treaty167.
Furthermore, this approach would also be in the interest of an international harmonization of
procedural principles for undertakings operation in the Union, due to the consideration of
compliance as a form of mitigation in the law of the Member States themselves as well as the EC’s
main trading partners168.
So what comprises the object and exigencies of a ” best practice compliance” and how should the
Commission evaluate them in order to assess the existence of organizational negligence?
On the level of the internal organization
Regarding the internal organization of compliance programs, three main parts can be distinguished:



policing measures or “instructive measures” ;
preventive measures; as well as
enforcement or repressive sanctioning169.
All three areas should be outlined by the management of the group170 and should pay attention to
finding the proper balance between ensuring that the firm includes the measures in its economically
effective level of activity as well as finding appropriate means and an internally accepted system of
enforcement. Regarding the first issue, the program should pay attention to the fact that in a modern
business organization, the competent employees or managers are confronted with a myriad of
decisions, sometimes even on a daily basis. Thus complying with the internal system should be clear,
unquestionable and in both the firms as well as the employees interest. The second issue of
166
Due to economic independence and the fact that the parent company cannot be accused of neglecting its
organizational supervision duties
167
See Case 100/80, Musique Diffusion Française v. Commission,. [1983] E.C.R. 1825, para. 15; as well last,
th
Court of First Instance of July 7 , Case T-224/00, recital 105, WuW/E EU – R 673 = (2003) 5 C.M.L.R. 12 –
Lysinkartell.
168
See Moosmayer,“ Die neuen Leitlinien der Europäischen Kommission zur Festsetzung von Kartellbußen“,
wistra 2007, 91, 94. Further see the United States Sentencing Commission, Guidelines Manual, §3 E1.1. (Nov
2006), Chapter 8: http://www.ussc.gov/Guidelines/2006_guidelines/Manual/gl2006.pdf; as well as the British
Office of Fair Trading’s guidance as to the appropriate amount of penalty for breaching articles 101 and 102
TFEU, http://www.oft.gov.uk/OFTwork/competition-act-and-cartels/.
169
Dreher, Kartellrechtscompliance, fn 142, 94; Jennifer Arlen and Reiner Kraakmann, Controlling Corporate
Misconduct : An Analysis of Corporate Liability Regimes, New York University Law Review 1997, 687-779.
170
-or demonstrate that a respectively necessary delegation is sustainably supported by it; see Dreher, ibid.
25
“prevention” adheres to the fact that an unbalanced or even ambivalent system of enforcement may
create a bad working atmosphere.
According to extensive case-law of the Member States, the implementation of all three areas should
consider the principles of objective suitability, necessity and reasonability171. For a basic point of
reference these principles are necessary, because no compliance program can eliminate illicit
behavior in its entirety172. The authorities should rather assess the corporate policy formulation,
design and enforcement of the program as well as the manner of carrying out the respective
infringement. Finally it is vital to regard that under some circumstances, the program needs to fulfill
increased standards173. This is for example the case if employees have already participated in
antitrust infringements174, that they are (over-)exposed to dangers of anticompetitive conduct due
to their range of activity, or in case that generally problematic situations have repeatedly occurred in
the past in the management of a specific subsidiary or market175.
For the assessment of the internal implementation of the program, considering the purposes of
European antitrust law and thus determining the appropriateness of attributing liability in the
parent-subsidiary debate, it should be borne in mind that the single employees are not addressees of
the Commission’s fines, but that the regulation of the firm-employee relationship is still a matter or
Member-State competence. In order to evaluate whether the general management of the group has
ensured an effective compliance system however, it is of course essential to regard the organization
of instruction and appropriate supervision of the agents behind the “corporate veil”. This is why the
constructed basic internal compliance rules and procedure should be periodically and conveniently
communicated to the group’s employees.
On the level of policing measures we can distinguish the content or topic of instruction and the
organization of this instruction. The first issue refers to the aim of providing the employees with the
necessary information on and reasons of antitrust provisions, as well as their advantages, scopes,
preconditions and legal consequences176. Of course this should not result in general instructions to
obey the relevant legal norms or to consult the legal department in the case of problems177. Rather it
is necessary to instruct employees “concretely”, that is regarding industry and field of activity.
The organization of this instruction and its supervision should adhere to differentiated standards. On
the one hand, it should allocate the responsibility of instructing the employees as well as ensuring
the contents value and efficacy. This includes ensuring that the topics are up-to date (periodic
coaching) and that they are not only instructed in oral lectures and discussion but comprise
documents for purposes of record.
171
Cf Göhler, OWiG, 13th edition, 2002, §130, recital 11; Schmid in: Müller-Gugenberger/Bieneck,
Wirtschaftsrecht, 3rd edition, 2000, §30, recital 87; BGH WuW/E 2262, 2265-note for the file line BGH of Jun.
th
25 1985-KRB 2/85, WuW/E 2202,2203- Brückenbau Hopener Mühlbach.
172
See above; Bosch, Colbus and Harbusch, fn 59, 745.
173
See Dreher, fn 142, 95.
174
Cf BGH WuW/E 2262,2265 – not for file line.
175
See Dreher, ibid. In this context, some authors have argued for the fact that the lower the probability of
detection in this area may be, the higher the necessary sanction should turn out. This standpoint will be
evaluated from a socially economic standpoint in point 3.2. of the dissertation in the context of the
Commission assessment of the respective design of the program.
176
Dreher, fn 142, 96.
177
Deutsches Kammergericht of July 25th 1980, WuW/E OLG (Oberlandesgericht) 2230,2232.
26
These measures of instruction should be supplemented by effective means of supervision to aim at
preventing infringements from happening in the first place. The organization of these measures
should be appointed to an impartial executive position178 and provide the concerned employees with
contact persons for the reconsideration and analysis in case of reasonable doubt. The management
board should be familiar with both the content as well as the procedure and implementation of the
policy measures. While the general responsibility of the program is assigned to the upmost
management of the corporate group, the implementation should be carried out by proficient
individuals, appointed with a specific range of duties and authority179. Furthermore a relevant and in
the Member States’ case-law much regarded part of preventive measures is the execution of spot
tests of corporate activity180. These kinds of tests are requisite and regularly also suitable to detect
possible wrongdoing, because they are a reminder that infringements will also be sanctioned181. This
effective consideration of (preventive) internal supervision on a European procedural level may lead
to substantial financial and organizational consequences for undertakings, having to adapt to this
increased factor of outsourcing sanctioning by the Commission182.
In order to prevent a depraved and suspicious working atmosphere firms are furthermore well
advised to provide its employees with a system which permits them to advert to illicit behavior in an
anonymous or confidential way without fear of the consequences183. Finally part of the goal of
effective supervision is the documentation and according duty of reporting to the companies
directorate within the scope of overall- responsibility184. This includes the timely preparation of risk
mapping, i.e. the assessment of the program’s effectiveness in regards to the development of the
company’s risk profile185.
The level of repressive sanctioning is bestowed with the enforcement of the (required) standards of
conduct, in order to demonstrate that infringements occurring all the same will be effectively
sanctioned186. These measures range from sanctions on the level of employment law to a claim for
damages against the responsible individual187. According to economic studies it has been
documented that “individuals are not rational utility maximizers, but rather are more deterred by a
178
Compliance manager or chief compliance officer as well as an independent compliance committee; See
Johannes Barbist, Michael Ahammer (ed.), Compliance in der Unternehmenspraxis, Lexis Nexis publishing,
2009, 3.
179
See Hofstetter and Ludescher, fn 52, 496.
180
Dreher, fn 142, 99. This point also refers to the company’s duty to pay special attention to the recruitment
of skilled and responsible employees for the staffing of the accountable positions; Hofstetter and Ludescher, fn
52, 497.
181
BGH WuW/E 1799- auditing department, Cf also BGH WuW/E BGH 2202,2203 – Brückenbau Hopener
Mühlenbach and BGH WuW/E 2329, 2333- Prüfgruppen. This point is of high importance for the internal
effectiveness of the program, which on the procedural level may subsequently reduce enforcement costs; See
Arlen and Kraakman, Corporate Liability Regimes, fn 65, 17.
182
Cf Dreher, fn 142, 100; Arlen and Kraakman, ibid.
183
This purpose could be fulfilled by so-called „Whistle-blowing“- programs or hotlines; Hofstetter and
Ludescher, fn 52, 497.
184
This duty is often already anchored in the corporation laws of the single member states.
185
Hofstetter and Ludescher, ibid.
186
Of course measures of enforcement play a substantial part in the prevention of further breaches from
occurring as they confirm effectively the firm’s credibility for its commitment to grant enforcement.
187
The latter has been an extensive point of discussion in the United States and has been grandmotherly
considered by the case-law of the European Member States.
27
high probability of a relatively low sanction than a low probability of a very high sanction”188. The
implementation of the program should therefore pay attention to take into account these economic
evaluations in their calculation of internal fines. For the procedural consideration of these measures
of sanctioning it is significant that the annunciated sanctions are also being effected189.
On the European procedural level: steering towards a “Best Practice Compliance” in setting the
optimal penalty
Antitrust fines in European Law have by now reached amounts that are unique on the international
level190. They have thus become an economic factor for corporate groups to bear in mind, which is
one of the reasons why Commission’s adherence to a clear economic concept for the calculation and
addressing of fines would be welcome. Apart from considering the dogmatic reasoning behind the
attribution of liability and considering the effective enforcement of internal organizational
supervision of corporate groups, it is helpful to regard the benchmarks of a legal concept that pays
tribute to economic factors for setting fines. This factor also sheds light on the effectiveness in
practice of the inclusion of parent companies for the liability of their subsidiaries191, that is the final
aim of deterrence192.
Though the usefulness of an economic approach is not always guaranteed in every situation of legal
analysis, it is suited comparably well for the study of antitrust offences, which generally result from
business decisions193. But while the EC authorities’ attention in the parent-subsidiary debate has
been focusing on the allocation of liability for the dogmatic reason of constructing an economic unit
judged by the notion of control194, the precise structure of this corporate liability has not been
assessed thoroughly from an economic point of view. In the reasoning on the procedural
insufficiencies of the European practice it has already been made clear that a fault-based approach
requires the general principle of organizational default as precondition for legal action. In order to
determine the exact dimension of imputing responsibility195 in the case of organizational negligence,
it is helpful to structure this approach by drawing on corporate liability regimes. This should, as
stated above, be implemented regarding the final aim of steering corporation’s conduct by the
means of (economically rational) deterrence.
Therefore this section will be structured in two parts, both closely interrelated and drawing on the
existence of internal compliance measures :
188
Arlen and Kraakman, Corporate Liability Regimes, fn 65, 14 citing R.J. Hernstein and J.Q.Wilson, Crime and
Human Nature, (1985).
189
BGH WuW/E 2202, 2204 – Brückenbau Hopener Mühlenbach.
190
Hofstetter and Ludescher, fn 52, 499.
191
Hofstetter and Ludescher, ibid.
192
Even though in antitrust enforcement deterrence is (essentially) dominant, a positive side-effect should of
course be prevention. (CF Wils, page 16).
193
Wouter P.J., Wils, The Optimal Enforcement of EC Antirust Law: Essays in Law & Economics, Kluwer Law
st
International (pub.), 1 edition, 2002, 6.
194
Which is of course an essential part of the assessment of the imputation of responsibility, but we will see in
point II of the thesis whether the assessment of this reference has so far been employed appropriately
considering economic reality.
195
This refers to both the cases when to attribute conduct, as well as the calculation of an economically
effective fine.
28


the first will assess when the head of the corporation has disregarded its corporate
supervision duties and can be held viable, considering the alternatives of strict versus dutybased, as well as “combinative” liability regimes ;
the second will assess the economic calculation of the fines issued, which should be set to
achieve the optimal level of deterrence.
The first part refers to the fact that the choice between the Commission’s current line of
argumentation draws upon the regime of strict-vicarious liability of corporate law, at least for cases
of major (100% or simple majority) shareholding. The dissenting voices in literature, requesting the
consideration of internal compliance measures bring into play the notion of a duty-based
assessment, which may hold corporations liable only in cases they have not adhered to supervisory
duties.
This distinction between strict-vicarious liability- and duty-based regimes draws from the discussion
of holding companies viable for their agents’ misconduct in other fields of law196. To be sure that the
calculation of fines satisfies the exigencies of considering supervisory duties and thus paying
attention to economic needs, the benefits and disadvantages of each corporate liability system
should be regarded. This is necessary as the choice of the best regime turns in part on the
characteristics of particular forms of misconduct197 and the progress of the effective implementation
of compliance programs. For example strict vicarious liability is preferable where corporate liability is
deployed to encourage (private) sanctioning within the group, so as to induce firms to adopt credible
preventive measures and reducing sanctioning costs on the procedural level. Duty-based regimes are
more appropriate to encourage firms to take steps for the optimal implementation of policing
measures198 , enhancing internal credibility of the firms enforcement measures.
Thus the reference of compliance measures for procedural aims should be applied in a way to
enforce sanctions where the group’s management has not done so despite an internal obligation,
and to exempt (or simply warn) firms from imputing liability where this would run counter the
deterrence aim.
Generally, strict vicarious liability199 is the most familiar regime of corporate law and most plausible
in the case that agents (annotation: subsidiaries) act in the best interest of their principals, or even
upon their instruction200. Given this assumption, forcing the firm (corporate group) to internalize
these costs of misconduct logically compels its agents (subsidiaries) to avoid it.
But if this assumption does not hold, and the firm (corporate group) has different interests from its
agents (subsidiaries) and cannot control them costlessly- then simple vicarious liability may no longer
be the preferred corporate incentive (deterrence) regime201. In this case, the state cannot deter
196
See Jennifer Arlen and Reiner Kraakman, Controlling Corporate Misconduct, fn 65; these areas reach from
criminal to environmental law. Therefore the following explanation is not a 100% true for corporate groups,
but I will use it for means of explaining the structure and its interrelation with the consideration of compliance.
197
See Arlen and Kraakman, fn 65, 11.
198
-instructing, monitoring, investigating, reporting199
(-of, generally formulated, principals in the case of wrongdoing by their agents-)
200
See Arlen and Kraakman, fn 65, 5. It is clear that a parent company may be held fully and severally liable for
illicit instructions, given to its subsidiaries as well as holding the subsidiary liable for this, because it should not
have followed this instruction based on general corporate law. (For reasons of simplicity we will assume that
economically “best interest” refers to fully complying with antitrust provisions.)
201
Arlen and Kraakman, fn 65, 6.
29
misconduct simply by setting liability high enough to ensure that a firms owner (corporate
management of the group) would prefer to avoid it202.
The following calculation of optimal fines for the aim of deterrence will assume that solely corporate
costs and benefits dive cartel decisions203. This assumption seems reasonable because the
involvement of top officers in these cartels suggests a negligible principal-agent problem204.
As regards to this cost-benefits calculation of undertakings, it is to be considered that compliance is
associated with significant costs and effort205. An undertaking will, under economically rational
considerations, incur these costs only, when they turn out lower than the expected fine for antitrust
infringements206. This assumes that an undertaking calculating accordingly, must also include the
probability of detection in its cost-benefit analysis207. Therefore the following gradations have been
recommended, in a first step recognizing the saved costs and in a second step the anticipated profits
of undertakings from cartel activities in the case of lacking compliance measures 208:
1. In the case that an undertaking (corporate group) has not set up any form of compliance, the
calculation of the fine to impose upon it must not only regard the savings from not
implementing compliance measures, but also the presumable profits resulting from antitrustactivities of its employees209. This amount should then be multiplied with the inverse of the
probability of detection210.
2. In the case that an undertaking has invested in compliance measures, but only insufficiently
in order to be freed from liability211, these precautionary measures must be
commemorated212. Furthermore, the setting of the fine would need to consider that the
probability of detection of illicit behavior by the subsidiaries’ employees decreases with
increasing compliance-efforts. Therefore the practice of fine setting should generate
incentives below the standard of “best practice compliance”.213
202
Arlen and Kraakman, ibid. The reason for this and the elements of setting an optimal base of the fine will be
included in the following thesis and would surpass the frame of this disposition.
203
Cf John M. Connor, Optimal Deterrence and Private International Cartels, Purdue University 2005,
http://www.agecon.purdue.edu/staff/connor/papers/Optimal_Deterrence.pdf, 8.
204
John M. Connor, ibid.
205
Hofstetter and Ludescher, fn 52, 500.
206
Of course this oversees other important considerations, such as moral beliefs and reputation in society, See
Wouter P.J. Wils, Efficiency and Justice in European Antitrust Enforcement, Oxford 2008, 55.
207
Cf Steven Shavell, Foundations of an Economic Analysis of Law, Harvard University Press 2004, 9.
208
Hofstetter and Ludescher, fn 52, 501. Note that this calculation also pays attention to the different possible
incentives that strict and duty-based regimes may exhibit.
209
Not like in practice solely the undertakings sales volume. Cf Guidelines of the Commission for setting fines in
antitrust cases, Regulation (EC) 1/2003, OJ. 2006, C 210/2, recital 4.
210
Cf John M. Connor, fn 203 and Wouter P. J.Wils, Optimal Antitrust Fines: Theory and Practice, World
Competition 2006, 191.
211
The above cited authors use the reference of complying with „Best-Practices-Compliance“, for this term see
Anita Nepraska, Europarechtliche Grundlagen von Compliance u. deren Umsetzung in Österreich: Analyse eines
Best Practice Modells, page 30 et seq., as well as an analysis of this in the thesis to follow.
212
Hofstetter and Ludescher, fn 52, 501.
213
Cf Steven Shavell, fn 198, 518f.
30
3. In the case however that an undertaking (corporate group) has employed a sufficient
compliance regime, no sanction should be imposed under the aspect of deterrence214. As
optimal deterrence theory is couched in terms of expectations of the founders and managers
of cartels215, this non-implementation of fines must hold despite the possibility of future
profits resulting from the illicit activity, because deterrence is not achieved if several
compliance efforts have been made.
Thus the following formula has been proposed216: fine= coc-cac/ p + (coc-cac/coc* ap/p), where




coc= costs of optimal compliance
cac=costs of actual compliance
p= possibility of detection
ap=anticipated profits from illicit behavior
Finally in order to grant a comprehensive consideration of all factors, the fine must include those
savings and profits, that have not been collected by civil claims217. While the availability of treble
damages suits is an essential part of US-antitrust practice, this feature has been treated rather
grandmotherly in the European Union until recently218. In order to reach an optimal deterrence level,
the fine must compensate solely those profits (cartel mark-ups) that have not been disgorged by civil
claims219. This is due to the fact that corporations will be determined to enhance their compliance
standards if a rational calculation would confirm that the fine in combination with civil claims would
erode the “benefits” of a sub-optimal compliance220. Therefore, the (anticipated) amount of civil
claims would need to be subtracted from the fine based on the above outlined formula.
Apart from the fact that the implementation of deterrence itself is somewhat sub-optimal due to
reasons of ambivalent conditions for the calculations of the formula’s basic assumptions, the topic
assignment in this issue will focus on the incentives of fining parent corporations for illicit behavior of
its subsidiaries s’ management. Even though the displayed discussion and criticism of the
Commission’s current practice is justified, the arguments often seem to go in the direction of “over214
The possibility of levying the profits resulting from the infringing behavior remain unaffected of this but
would not be enacted under the aspect of deterrence, See Hofstetter and Ludescher, ibid. Currently the
Commission’s practice of setting fines explicitly does not include this feature.
215
Steven Shavell, fn 198, 8.
216
This simplified formula also pays tribute to the factors of size as well as duration of the infringement. The
larger the corporate group is, the higher the costs of optimal compliance measures will be. The duration of the
respective infringement is reflected in the amount of anticipated profits from the illicit behavior; Hofstetter and
Ludescher, fn 52, 502. This formula has been derived from a base formula of fining in antitrust cases: F= E(C)/p,
where F is the optimal fines, E (C) is the cost of participating in the cartel and p the the probability of detection;
see John M. Connor, fn 194, 11.
217
In order to provide for a fully complete formula the probability of extrajurisdictional sanctions would need
to be included but this is beyond the range of this disposition. Furthermore the empirical data for the
assumptions of the formulas are not discussed.
218
nd
See the Commission’s white paper on damages actions for breach of EC antitrust rules of April 2 2008,
COM (2008), 165 final. (The question of effective enforcement of US damages claims will be treated in the
thesis).
219
Because the fine is regularly settled, before civil claims can be pushed through (achieved), the authorities
must make an assessment of the estimated value of possible civil claims, based on its findings. In fine
companies appropriately in this perspective, the Commission should pay regard to pre-judgment interest, as
deterrence is subverted by legal systems that allow violators to expect to pay monetary penalties in
depreciated currency ( John M. Connor, fn 203, 21).
220
Hofstetter and Ludescher, ibid.
31
deterrence” and “unprecedented” heights of the fines. This view is to be seen with precaution as
there are a number of reasons why the notion of over-deterrence is yet to quickly articulated
andneeds to be assessed considering a wide range of factors221. The criticism of the present means of
assessing fines to include parent corporations is rather a question of constitutional legality or due
process as well as the Commission’s duty to steer companies supervisory standards more efficiently
and comprehensive222.
However it is a fact that economically rational calculating actors are willing to follow the law
voluntarily under the expectation of reward or social standing223. Because the fines’ upper limit is
always a political decision it should grant the consideration of the corporation size and management
structure224. Insofar an extended attribution of liability and correspondingly of the fines upper limit is
functionally only reasonable, if this would lead to an optimized deterrence factor.
IV.
Implications of the Recent Principles in European Antitrust Law on the
International and National (Member – State) Level
On a worldwide market, international cooperation and strategic alliances of companies are a
universal phenomenon. International or global cooperation and concentrations have in common,
that they often share the scope of application of more than one territorially limited jurisdictions225.
Therefore the respective jurisdiction also needs to define its extraterritorial scope and facts of a case
to consider, despite the “nationality” of the concerned corporations.
The application of European law needs to be confined from the competence of its Member States on
the one hand, as well as a claim for competence of third countries on the other. Conflicts between
the Member States and Community law are resolved by the primacy of the latter as well as the
requirement of an intergovernmental aspect to the case. In relation to third countries the issue is
more like that one between independent states226. States however regularly aim for maximizing the
effectiveness of their politics227. This leads to the tendency, wherever possible, of expanding the
territorial jurisdiction of their competences228.
The first to determine a far reaching extraterritorial jurisdiction for competition matters was the
judicial practice in the United States. According to one of its earliest decisions229, this practice draws
solely on the distortive effects of the harmful conduct on the domestic (American) market. Hence
221
For a more precise executive summary and commentary see John M. Connor, fn 194, 18f.
The corresponding reasonable dogmatic grounds and criteria of reference (also in respect to a consistent
and predictable case-law) will be discussed in part II.
223
Cf Steve Shavell, fn 198, 479ff.
224
Cf Gerhard Dannecker and Jörg Biermann in: Immenga/Mestmäcker, Wettbewerbsrecht, 1st volume,
Kommentar zum Europäischen Wettbewerbsrecht, 4th ed., Munich 2007, Art 23 Reg. 1/2003, recital 100.
225
Mestmäcker/Schweitzer, fn 21 §6, recital 2.
226
Mestmäcker Schweitzer, fn 21, §6, recital 3. For its areas of competence the Community (comment: now the
Union) possesses international legal personality.
227
Jürgen Schwarze, „Die extraterritoriale Anwendbarkeit des EG-Wettbewerbsrecht-Vom
Durchführungsprinzip zum Prinzip der qualifizierten Auswirkung“, WuW 12/2001, 1190 (1191).
228
Schwarze, ibid.
229
nd
The so-called ALCOA-decision: United States ./. Aluminium Co. of America (2 Cir. 1945) 148 F. 2d 416.
222
32
already a marginal effect on the domestic market was sufficient for approving jurisdiction230 even if
the illicit agreement and its implementation was enforced abroad.
Due to negative reactions on the international level of this obviously far reaching “effects doctrine”
applied in the United States, evoking a substantial impact on the jurisdictions of other states231, this
approach was later on relativized. By now it is required232 that the distortive behavior must have a
“direct, substantial and reasonably foreseeable effect” on the US market233. This qualified application
of the effects doctrine was a first attempt to consider the principle of “comity” in international law
and to give reasons for a more reserved exertion of jurisdiction234. At the same time, the American
antitrust practice is an essential element of the practice of states to determine international
customary law235. Therefore the adoption of this approach was not truly altruistic, but includes the
consideration that drawing on a principle of international law is in itself a kind of state practice which
can be countered by implementing it against the respective state on other occasions.
In international law there are a number of principles that have different points of references to
national law. Apart from the effects doctrine, which is sometimes qualified as an objective principle
of territoriality, further principles are those of subjective territoriality as well as the principle of
personality236.The latter refers to the “nationality” of the undertaking concerned, which is
determined by either its registered office (headquarters), the center of its business activity or the law
under which it was constituted237. The principle of territoriality on the other hand refers to the
competence of a state to exert its discretionary sovereignty on facts of a case that take place on its
territory238.This is independent of the fact whether domestic or foreign private or legal persons are
concerned. Problematic however is the extension of subject matter jurisdiction on those cases that
only partly take place on the domestic market, which in fact can lead to a parallel jurisdiction of more
than one state239.
Until the Zellstoff-case of the ECJ240 it was disputed which of the principles was applicable to EC
competition law. While General Attorney Darmon extensively explained the basis of the
extraterritorial application under EC and international law, referring to the practice of the effects
doctrine under US law, the ECJ held that “the Community’s jurisdiction to apply its competition rules
to such conduct is covered by the territoriality principle as universally recognized in international
230
Schwarze, fn 220, ibid.
S. Elsing/ M. van Alstine, US-amerikanisches Handels- und Wirtschaftsrecht, 2nd edition, Heidelberg 1999,
344; P.Torremans, “Extraterritorial Application of E.C. and U.S. Competition Law”, 21 E.L. Rev. (1996), 280
(281); Schwarze, Jurisdiktionsabgrenzung im Völkerrecht- Neuere Entwicklungen im internationalen
Wirtschaftsrecht, Baden-Baden 1994, 43.
232
And has again been recently confirmed in case-law discussing the subject matter of jurisdiction of the FTAIA;
for further discussion on this see below.
233
Constraint according to the case United States ./. Watchmakers of Switzerland Information Center 1963
Trade Cases No 70, 600 (SDNY 1962).
234
Cf Meessen, Antitrust Jurisdiction Under Customary International Law, AJIL 78 (1984), 783.
235
Meessen, Schadenersatz bei weltweiten Kartellen, WuW 11/2005, 1116- and thus has influenced European
competition law substantially: see Holger Fleischer/Torsten Körber, „Der Einfluss des US-amerikanischen
Antitrustrechts auf das Europäische Wettbewerbsrecht“, WuW 1/2001, 6f.
236
Schwarze, fn 220, 1192.
237
Cf Schwarze, ibid.
238
Cf R. Lane, EC Competition Law, Harlow 2000, 278.
239
Cf Schwarze, fn 220, 1193.
240
ECJ joined cases 89, 104, 114, 116, 117 and 125 to 129/85, Court of Justice Reports of 1988, 5227, recital 16
et seq., WuW/E EWG/MUV 829.
231
33
law”241. Interestingly, the Court had already before this decisive case ruled on the extraterritorial
application of European competition law, avoiding the determination of a specific principle by
drawing on the concept of the single economic entity242. By the means of this theory, the ECJ could
attribute the illicit conduct of European subsidiaries to the foreign parent corporation by the
assumption of a single undertaking resulting from the affiliation243. In minimizing the requirements
for the assumption of decisive influence, the Court extended the Community’s scope of jurisdiction
susceptibly, especially in regard to the relation with its most important trading partner, the USA.
The extensive attribution of liability for antitrust breaches by subsidiaries is characterized by an
interesting feature in the context of (extending) extraterritorial subject matter jurisdiction. At first
sight it seems to share the above described issue of parallel application of more than one jurisdiction,
that is to say the principle of personality for a reference of competence of the foreign state on its
undertaking (as head of the group) and as well as the effects doctrine244 for the application of
European antitrust law. But considering the above assessed problems with extending jurisdiction
under the practice and principles of international law two issues of discussion arise:
(1)Taking into account the fact that US practice has a primarily different substantive approach to
competition law than the European authorities245, the consequences of this expansion of subject
matter jurisdiction through a recently confirmed practice of extensive interpretation of the single
economic entity doctrine are yet to be assessed under the principle of comity and non-intervention.
(2) Furthermore the parent company, experiencing a rigorous financial cut-back will naturally seek
protection in its own jurisdiction. The second issue refers to the practical litigation effects of this
comprehension of (foreign) parent corporations into their subsidiaries antitrust litigation, especially
regarding the possibility of private parties’ claim for damages.
The second issue refers to the well important prospect of European private parties’ file for damages
against the (American) parent corporation under the Foreign Trade Antitrust Improvement Act246.
This law has the purpose of defining the subject matter jurisdiction of the Sherman Act, for cases that
are concentrated on the foreign market and also produce their negative consequences on this
market247. According to this law, US courts are competent to decide on claims for treble damages in
the case that an illicit conduct committed outside the country (1) breaches American Antitrust Law
241
See ECJ, ibid (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:61985J0089:EN:NOT).
This practice had been effected since the Court’s ICI-decision, fn 32, ECR-1972, 619 (665), WuW/E
th
EWG/MUV 269; ECJ Case 52/69, judgment of July 14 1972, Geigy vs. Commission, ECR-1972, 837, WuW/E
th
EWG/MUV 287; ECJ Case 53/69, judgment of July 14 1972, Sandoz vs. Commission, ECR-1972, 845; ECJ joined
nd
cases 6, 7/73, judgment of January 22 1974, Commercial Solvents vs. Commission, ECR-1974, 225, recital 36
et seq.
243
Cf R.Lane, EC Competition Law, fn 231, 284; E. Rehbinder in: Immenga/Mestmäcker, Kommentar zum EGWettbewerbsrecht, vol. 1, Munich 1997, 72, recital 58; A. Riesenkampff, „Haftung der Muttergesellschaft für
kartellrechtswidriges Verhalten der Tochtergesellschaft“, WuW 1/2001, 357.
244
In the form of a “direct, substantial and reasonably foreseeable effect” on the European market through the
subsidiaries illicit conduct.
245
A good example may be the press release of the DOJ of its Assistant Attorney General Charles A. James of
rd
July 3 2001 considering the negative decision by the European Commission of the GE/Honeywells Merger
(www.usdoj.gov).
246
FTAIA, 15 U.S.C. §6a.
247
Cf George E. Garvey, "American Retreat From Extraterritorial Antitrust Enforcement: Consequences of New
Legislative Policies for an International Competitive Economy", Rabels Zeitschrift für Ausländisches und
Internationales Privatrecht 51 (1987): 401.
242
34
due to a direct, substantial and reasonably foreseeable effect in the United States and (2)
additionally gives rise to a claim in the sense of § 6a (2) FTAIA248.
Due to inexplicit formulations in the law, the US-Supreme Court defined the scope of application of
this law in the Empagran- Case 249, holding that the law should not be extended to conduct outside
United States that is independent of damages inside the country. As to the relation when this
required nexus could be assumed, the court stated that a simple appliance of a sine qua non in the
United States would not suffice, but that in fact a “direct causal relationship, that is, proximate
causation” was necessary250. In the pending litigations it was not disputed however, whether the
illicit comportment had the respective considerable effect on the American market, but rather which
conduct could give rise to “a claim” under the FTAIA251. Infringements of the Sherman Act can only be
prosecuted if they are justified according to the reference in Sec. 4 and Sec 16 of the Clayton Act, the
latter comprising claims for an injunctive relief.
The term of a claim comprises the competence of the antitrust authorities to take legal action against
conduct infringing the Sherman Act, as well as private claims that are justified under the Clayton Act.
Consequently, based on the scope and history of formation of the law, this leads to the question of
the role of foreign claimants for the enforcement of American antitrust law252. The ambivalent
perceptions of this issue result from diverging interpretations of the intended spirit and purpose of
the FTAIA.
On the one hand, there is mutual consent of the fact that it is not the purpose of antitrust laws to
protect competition on foreign markets. Nevertheless the US supreme court decided back in the year
1978253 that the right of foreign plaintiffs to sue is consistent with the rationale of deterring potential
offenders in presenting them with the bill of their illicit foreign conduct and thus protecting the
American market from distortive effects of global conspiracies. This argument may well be employed
on the interpretation of §6a (2) FTAIA. An extensive interpretation of the subject matter jurisdiction
of this law in favor of foreign claimants for harms suffered abroad is indispensable to prevent the
effects of the illicit international conduct from distorting the American market254.
The question whether the preconditions of these distortive effects on the American markets may be
assumed in the case of the American parent companies’ conviction for illicit conduct by one of its
subsidiaries abroad, is yet to be discussed. Considering the amount of damages that foreign plaintiffs
may well seek to obtain, this issue may be of high practical relevance255.
248
For an extensive discussion on this see: Mestmäcker/Schweitzer, fn 21, §6, Die Internationale
Anwendbarkeit der Wettbewerbsregeln, recital 25ff;.; WuW/E 6/2005, 677, „Durch Gesetz modifiziertes
Wirkungsprinzip“, United States Court of Appeals, ruling of August 11th 2004, 379 F. 3d 672 (C.A. 9.2004)U.S./LSL Biothechnologies.
249
Empagran S.A. v. F. Hoffmann-La Roche Ltd., 417 F. 3d 1267 (D.C. Cir 2005), WuW/E KRInt 103.
250
US Supreme Court, Empagran S.A. v.F. Hoffmann-La Roche Ltd., 315 F 3d 338 (D.C. Cir. 2003)- and that
Empagran and the other appellants had not asserted such a connection; WuW/E 1/2004, 101,“ Dreifacher
Schadenersatz weltweit“.
251
Cf Mestmäcker/Schweitzer, fn 21, §6, recital 26.
252
Cf Mestmäcker/Schweitzer, fn 21, recital 27.
253
US Supreme Court, Pfitzer Inc. v Government of India, 434 US 308, 314 (1978).
254
Cf Mestmäcker/Schweitzer, ibid; WuW 2001, 101.
255
In this context it is of course worthy to discuss to what extent American courts may be bound by the ECJ’s
decision.
35
Therefore the last point of my thesis aims to discuss the above posed issue, as well as the question of
the ECJ’s adherence to international limitations of subject matter jurisdiction in construing the single
economic entity doctrine extensively, regardless of different substantive approaches to the question
of attributing liability in a corporate group in foreign jurisdictions256.
V.
Methodology
For the assessment of the issues drawn out above, my main focus will be on the outlining and critical
discussion of case-law as well as literature on these matters. Apart from a focus on European
literature of the Akzo Nobel case and its broad reaching effects, it seems appropriate to extend the
perspective to a comparison of law and practice on this matter abroad as well in the Member States
themselves. In the section of my thesis on the international repercussions of this case, it may be
interesting to line out the influence US-antitrust law has had on the European practice, but also
highlighting the diverting aspects that derive from different substantive approaches determined by
the structure and general aim of protecting a competitive market.
I intend to draw on English, German and French literature.
VI.

Bibliography
Books
1. Richard Wish, Competition Law, 6th edition (2009), Oxford University Press.
2. Allison Jones and Brenda Sufrin, EC Competition Law, 3rd edition (2007), Oxford University
Press.
3. P. J. Wils, Wouter, Efficiency and Justice in European Antitrust Enforcement, Hart Publishing,
Portland USA 2008.
4. Peter Versteegn, Carl Heymanns, Konzernverantwortlichkeit und Haftungsprivileg, Verlag KG,
Köln 1992.
5. Peter Bernholz & Roland Vaubel (eds.) , Political Competition & Economic Regulation,
Routledge, London 2007.
6. Baron, Federle, Jürgens, Compliance im Kartellrecht, Verlag C.H. Beck, 2011.
7. Christoph E. Hauschka, Corporate Compliance: Handbuch zu Haftungsvermeidung im
Unternehmen, 2. Auflage, Verlag H.C. Beck.
8. Johannes Barbist, Michael Ahammer, Compliance in der Unternehmenspraxis, Lexis Nexis,
2009.
9. Katalin J. Cseres, Maarten Dieter Suhinkel, Floris O.W. Vogelaar, Criminalization of Competition
Law Enforcement: Economic and Legal Implications for the EU Member States, Edward Elgar
Publishing, Massachusetts 2006.
10. Hanns Ullrich, Comparative Competition Law: Approaching an International System of
Antitrust Law, Nomos Verlag, 1998.
11. Broder, Douglas F., A Guide to US Antitrust Law, publisher: Sweet & Maxwell , 2005.
12. Martin Buntscheck, Das “Konzernprivileg” im Rahmen von Art 81 Abs. 1 EG-Vertrag, Nomos
256
The consideration of compliance norms and values of corporation for assessing their culpability is an
established practice in the United States, not only in antitrust law; See the United States Sentencing
Commission, Guidelines Manual, §3 E1.1. (Nov 2006), Chapter 8:
http://www.ussc.gov/Guidelines/2006_guidelines/Manual/gl2006.pdf.
36
Verlagsgesellschaft, Baden-Baden, 2002.
13. Petra Pohlmann, Der Unternehmensverbund im Europäischen Kartellrecht, Dunckler &
Humblot, Berlin 1999.
14. Steven Shavell, Foundations of an Economic Analysis of Law, Harvard University Press,
Cambridge Massachusetts, 2004.
15. Meessen, Antitrust Jurisdiction Under Customary International Law, AJIL 78, 1984.
16. Wouter P. J. Wils, Optimal Antitrust Fines: Theory and Practice, World Competition 2006.
17. Wouter P.J. Wils, The Opitmal Enforcement of EC Antitrust Law: Essays in Law & Economics,
Kluwer Law International, 1st edition 2002.
18. John M. Connor, Optimal Deterrence and Private International Cartels, Purdue University
2005.
19. Karl Hofstetter, Sachgerechte Haftungsregeln für Multinationale Konzerne: Zur zivilrechtlichen
Verantwortlichkeit von Muttergesellschaften im Kontext internationaler Märkte, Tübingen
1995.
20. Mestmäcker/Schweitzer, Europäisches Wettbewerbsrecht, Baden Verlag, 2. Auflage, München
2004.
21. Cynthia Day Wallace, The Multinational Enterprise and Legal Control: Host State Sovereignty in
an Era of Economic Globalization, Martins Nijhoff Publishers 2002.
22. Michael Menz, Wirtschaftliche Einheit und Kartellverbot: Die Stellung des Konzerns im
Rahmen des Kartellverbots nach deutschem, europäischem und US-amerikanischem Recht,
Duncker & Humblot, 2004.

Commentaries
23. Kommentar zum Europäischen Wettbewerbsrecht, Schröder/Jakob/Mederer (Hrsg.), (2003),
Nomos Verlag.
24. Kommentar zum EWG-Vertrag, Groeben/Boeckh/Thiesing, (2.Auflage), Baden-Baden.
25. Kommentar zur Europäischen Union, Grabitz/Hilf, 38. EL 38. 2009.
26. EU-Kommentar, Jürgen Schwarze, Nomos Verlag, 2009.
27. Österreichisches und Europäisches Wettbewerbsrecht, Koppensteiner, 3. Auflage (2007),
Verlag LexisNexis, Wien.
28. Kommentar zum Gesetz gegen Wettbewerbsbeschränkungen, Immenga/Mestmäcker, vol 1,
3rd edition, 2001.
29. EUV/EGV, Streinz (Hrsg.), München 2003.
30. Frankfurter Kommentar zum Kartellrecht, Grundfragen Art 81 Abs 1 EG-Vertrag,
Roth/Ackermann, 1999.
31. Handbuch des Kartellrechts, Wiedemann, 2. Auflage 2008, C.H. Beck.

Articles
32. Rechtsprechung, Haftung der Muttergesellschaft für Kartellverstöße ihrer
Tochtergesellschaften, EuZW, Heft 22/2009, 816 ff.
33. Heinz Joachim Freund, Verteidigungsrechte im kartellrechtlichen Bußgeldverfahren, EuZW,
Heft 23/2009, 839 ff.
34. Author, Das kartellrechtliche Konzernprivileg, Festschrift Peter Doralt-Anmerkungen zur
„Postbus-Entscheidung“ des OGH, 577ff.
37
35. Peter Sander, Das Konzernprivileg im Europäischen und Österreichischen Wettbewerbsrecht ,
OZK 2008, 20.
36. Michael Kling, Die Haftung der Konzernmutter für Kartellverstöße ihrer Tochterunternehmen,
WRP, 2010, 506.
37. Christina Hummer, Kartellrechtliche Haftung von Muttergesellschaften, ecolex 2010, 64.
38. Tremmel, Zum kartellrechtlichen Konzernbegriff, wbl 2005, 490.
39. Johannes Reich-Rohrwig, Vermutung eines bestimmenden Einflusses der Muttergesellschaft
auf wettbewerbswidrig handelnde 100%ige Tochtergesellschaft, ecolex 2010, 126.
40. Walter Brugger, „Die Geldbussenbemessung nach §30 KartG 2005“, OZK 2009, 172.
41. Konzernweite Haftung bei Kartellverstößen, BeckRS 2009, 70987.
42. Rechtsprechungsübersicht, Ausgleichsanspruch eines Tankstellenpächters nach HVerG und
„Handelsvertreterprivileg“ nach Ar6t 81 EGV“, JBl 2010, 312.
43. Dreher, Kartellrechtscompliance, ZWeR 1/2004.
44. Gruber, Kartellrecht: Handbuch zur Kronzeugenregelung, RdW 5/2006, Art.Nr. 250, 261.
45. Philipp Sharaf, Die neuen Bußgeld-Leitlinien im EG-Kartellrecht vor dem Hintergrund der
Entscheidungen der Kommission und der Rechtsprechung, wbl 2007, 1.
46. Alleinige und gemeinsame Kontrolle über ein Unternehmen, ÖBl 2008, 49.
47. Yves Botteman and Laure Atlee, An Update on Parent Liability for Antitrust Violations of
Subsidiaries, Steptoe’s EU Competition Practice.
48. Johannes Reich-Rohrwig, Die Leitungsverantwortung des Vorstandes im Konzern, ecolex
2010,359.
49. Martin Buntschek, Die gesetzliche Kappungsgrenze für Kartellbußen: Bedeutung und
Auslegung im Lichte der neuen Bußgeld-Leitlinien von Kommission und Bundeskartellanwalt,
EuZW 2007, 423.
50. Rechtsprechungsübersicht, Kartellrechtliche Haftung einer Muttergesellschaft, EuG, Urteil
vom 30.04.2009, T- 12/03, Itochu/Kommission, WuW 6/2009, 708.
51. Dirk Schroeder, Die Anwendung des Kartellverbotes auf verbundene Unternehmen, WuW
4/1988, 274.
52. Günter Bauer, Nina Reisner, Erweiterte Zurechnung des Verhaltens Dritter bei der Festsetzung
von Geldbußen im EG-Kartellrecht?, WuW 7 u 8/2007, 737.
53. Daniel Zimmer, Thomas Paul, Kartellbußgeldrechtliche Haftung und Haftungsbefreiung im
Konzern, WuW 10/2007, 970.
54. Rechtsprechung zum Wettbewerbs- und Kartellrecht, Vermutung des bestimmenden
Einflusses der Muttergesellschaft auf wettbewerbswidrig handelnde 100%ige
Tochtergesellschaft („Akzo Nobel“), ZIP 8/2010.
55. Alexander Riesenkampff and Udo Krauthausen, Liability of Parent Companies for Antitrust
Violations of their Subsidiaries, E.C.L.R., issue 1 (2010).
56. Garzaniti and Cassellati-Sforzolini, Liability of Successor Undertakings for Infringements of EC
Competition Law Committed Prior to Corporate Reorganizations“,16 E.C.L.R.,1995, 348.
57. Chandler, Successor Liability for Competition Law Infringements and How to Avoid It,
Competition Law Journal 2006, issue 5, 63.
58. Ryan P. Meyers, Partial Ownership of Subsidiaries, Unity of Purpose, and Antitrust Liability, in
Chicago Law Review 2001, October 1.
59. Kees Jan Kuilwijk and Diarmuid Ross Phelan, On the deductibility of fines for EC competition
infringements, European Competition Law Review, issue 3 2010, 131.
38
60. Thomas Kapp, EG-Kartellrechtliche Fehlentwicklung bei Handelsvertreterverträgen?, WuW
10/1990, 814.
61. Rainer Berchtold, Zum Ermessen der Kommission in Bußgeldverfahren, Kommentar in WuW
10/2009, 1115.
62. Martin Buntschek, Die „überschießende Umsetzung“ des europäischen
Kartellordnungswidrigkeitenrechts, Kommentar in WuW 7 u 8/2009, 990.
63. Martin Buntschek, § 81 Abs 4 GWB n.F.- die geänderte Obergrenze für
Unternehmensgeldbußen, WuW 9/2008, 940.
64. Jürgen Schwarze, Rechtsstaatliche Defizite des europäischen Kartellbußgeldverfahrens, WuW
1/2009, 6.
65. Wolfgang Bosch, Birgit Colbus, Antonia Harbusch, Berücksichtigung von ComplianceProgrammen in Kartellbußgeldverfahren, WuW 7 u 8/2009, 740.
66. Meinrad Dreher, Kartellrechtscompliance, ZWeR 1/2004, 75.
67. Geldbußen gegenüber Unternehmensvereinigungen und ihren Mitgliedern, Coop de France
bétail et viande/Kommission, WuW/E 2/2009, 225.
68. Rechtsprechung, Wertungsspielraum der EU-Kommission bei Bußgeldbemessung, EuZW Heft
10/2010.
69. Uwe Schneider, Compliance als Aufgabe der Unternehmensleitung, ZIP 2003, 645.
70. Herbert/ Oberrath, Schweigen ist Gold? - Rechtliche Vorgaben für den Umgang des
Arbeitnehmers mit seiner Kenntnis über Rechtsverstöße im Betrieb, NZA 2005, 193.
71. Near/Miceli, Organizational dissidence: The case of whistleblowing, Journal of Business Ethics
1985, 4.
72. Vandekerckhove/Commers, Whistle Blowing and Rational Loyalty, Journal of Business Ethics
2004, 225.
73. Ralf Kittelbeger, External Reporting als Pflicht zum Whistleblowing, ÖBA 2007, 90.
74. Berndt/Hoppler, Whistleblowing - ein integraler Bestandteil effektiver Corporate Governance,
BB 2005, 2623.
75. Daniele Calisti, Filip Kubik, Christian Vollrath, Taking compensation seriously as part of an
effective antitrust enforcement: The White Paper and beyond, OZK 2008, 203.
76. Martin Oder/Birgit Schoißwohl/Ernst Tremmel, Rechtsprechungsübersicht Europäische
Gerichte, ecolex 2008, 593.
77. Gruber, Strengere Strafen im europäischen Kartellrecht, ecolex 2006, 211.
78. Christina Hummer, Kronzeugen – ein neues Zeitalter der Kartellbekämpfung, ecolex 2006,
11f.
79. Hintersteininger, Gemeinschaftsrechtliche Schadenersatzpflicht bei Verstoß gegen Art. 81 EG,
wbl 2001, 554ff.
80. Fussenegger, USA- Land der unbegrenzten Möglichkeiten- Die Durchsetzung extraterritorialer
Schadenersatzansprüche im Kartellrecht, ecolex 2006, 125.
81. Karollus, Schadenersatz wegen EG-Kartellrechtverstoßes auch für Verbraucher, ecolex 2006,
797.
82. Christoph Hack, Handlungsmöglichkeiten Einzelner bei Kartellrechtsverletzungen, ecolex
2003, 311.
83. Thomas Eilmansberger, Die Lombard-Club-Entscheidung der Kommission, ecolex 2002, 560;
Hans Peter Lehofer, Alte Clubs und neue Architektur, ÖJZ 2009/90.
39
84. Joint Comments of the American Bar Association’s Section of Antitrust Law and Section of
International Law on the European Commission’s Consultation on the Functioning of
Regulation 1/2003, October 3, 2008.
85. Lukas Röper, Kartellrechtliches Auswirkungsprinzip und Hold Separate Agreements, wbl 2009,
379.
86. Ernst-Joachim Mestmäcker, Staatliche Souveränität und offene Märkte, Konflikte bei der
extraterritorialen Anwendung von Wirtschaftsrecht, RabelsZ 1988, 205.
87. Jürgen Basedow, Wirtschaftskollisionsrecht: Theoretischer Versuch über die
ordnungspolitischen Normen des Forumstaates, RabelsZ 52, 1988, 9.
88. Florian Wagner-von Papp, Kartellstrafrecht in den USA, dem Vereinten Königreich und
Deutschland, WuW 12/2009, 1236.
89. Jürgen Schwarze, Die extraterritoriale Anwendbarkeit des EG-Wettbewerbsrechts- Vom
Durchführungsprinzip zum Prinzip der qualifizierten Auswirkung, WuW 12/2001, 1190.
90. Karl M. Meessen, Schadenersatz bei weltweiten Kartellen, WuW 11/2005, 1115.
91. Dreifacher Schadenersatz weltweit, United States Court of Appeals – Empagran S.A. v.F.
Hoffmann La-Roche, WuW/Entscheidungssammlung 1/2004,101.
92. Durch Gesetz modifiziertes Wirkungsprinzip, United States Court of Appeals – U.S./LSL
Biotechnologies, WuW/E 6/2005,677.
93. Holger Fleischer, Torsten Körber, Der Einfluss des US-amerikanischen Antitrustrechts auf das
Europäische Wettbewerbsrecht, WuW 1/2001, 6.
94. Krejci, Partnerschaft, Verein, Konzern, GA 10. ÖJT (1988), I/1, 241.
95. Vito Roberto, Martin Petrin, Organisationsverschulden aus zivilrechtlicher Sicht in: M.A.
Niggli/Marc Amstutz.
96. Martin Pertin, The Curious Case of Directors‘ and Officers‘ Liability for Supervision and
Management: Exploring the Intersection of Corporate and Tort Law, American University Law
Review 59, no.6, August 2010, 1661-1711
97.

Judgments
1. Case C-97/08, Akzo Nobel NV v. Commission, Judgment of the Court on 10 September 2009.
2. Case T-175/05, Akzo Nobel NV v. Commission, Judgment of the Court of 30 September 2009.
and Case T-168/05, Arkema SA v. Commission, Judgment of the Court of 30 September 2009.
3. E 2005/566/EG, C.37 533-Chlorinchlorid, Entscheidung der Kommission vom 9.12.2004
(ABlEU 2005 Nr. L 190, 22).
4. Case C-286/98 P, Stora Kopparbergs Bergslags AB v. Commission, [2000] ECR I-9925, para.
26.
5. Case T-325/01, DaimlerChrysler AG v. Commission, [2005], ECR II-03319, para. 221.
6. Case 107/82, AEG v. Commission, [1983] ECR 3151, at para. 49.
7. Case T-9/99, HFB and Others v. Commission, [2002] ECR II-1487, paragraph 54; and Case C41/90, Höfner and Elser v Macroton GmbH, (1991) ECR I-1979, (1993) 4 CMLR 306, para.21.
8. Joined Cases T-71/03, T-74/03, T-87/03 and T-91/03, Tokai Carbon v. Commission, [2005]
ECR II-00010*, para. 60.
9. Case T-203/01, Slg. 2003, II-4071 = BeckRS 2008, 70897 recital 290- Michelin v. Commission,
Judgment of the Court of 30 Septmeber 2003.
40
10. Case T-314/01, Slg. 2006, II-3085 = BeckRS 2006, 70745 recital 136- Avebe v. Commission,
Judgement of the Court of 27 September 2006.
11. Case T-305/94, Slg. 1999, II-931 recital 978- Limburgse Vinyl Maatschappij v. Commission,
‘PVC II’, CFI on 20 April 1999.
12. Case-48/69, 619=BeckRS 2004, 73172 recital 137- ICI v. Commission, and Case 52/69, Slg
1972, 787= BeckRS 2004, 73261, recital 45- Geigy v. Commission, Judgments of the Court of
14 July 1972.
13. Case 6/73, Slg. 1974, 223= BeckRS 2004, 73398, recital 37 and 39-41-Istituto Chemioterapico
Italiano (ICI) and Commercial Solvents v. Commission, Judgment of the Court of 6 March
1974.
14. Case T-102/92, Slg. 1995, II-17, recital 48- Viho v. Commission, CFI on 12 January 1995.
15. Case COMP/F/38.620-Hydrogen Peroxide & Perborate, Commission Decision of 3 May 2006.
16. Case T 170/83- Hyodrotherm, recital 10 et seqq.(ff) Judgment of the Court.
41