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: The limited role played by intent and imputability in the antitrust realm

From a theoretical viewpoint, intent and imputability are two of the most controversial concepts related to Commission’s and NCAs’ sanctioning powers. As mentioned, the ECN+ Directive has recently requested NCAs to follow the same approach to these notions developed at the EU level.[1]

EU competition rules do not mention intention as a necessary element to ascertain antitrust infringements. The case law contains virtually no reference to the role of intent for the application of Articles 101 and - particularly - 102 TFEU. By affirming that “ the intention of the parties is not an essential factor in determining whether a concerted practice is restrictive" nor "a necessary factor in determining whether an agreement is restrictive” , the ECJ essentially confirmed that a quasi-strict liability regime applies to antitrust offences.

After all, competition is not about morality but about efficiency and the market structure’s preservation: just as dreaming about monopolies is not a competitive issue but rather fuels economic growth, so a collusive scenario achieved without the undertakings having planned it represents a competitive problem.

While intent is not a constitutive element of antitrust offences, it may be relevant to impose and quantify sanctions. According to Article 23 of Regulation (EC) No 1/2003 and Article 13 of the ECN+ Directive, sanctions can be imposed “ow undertakings [...] where, either intentionally or negligently they infringe” competition rules. Once again, therefore, divergent standards of proof apply to the establishment and the sanctioning of antitrust offences.

Actual perception of being breaching competition rules is not requested[2] and the condition is satisfied if infringers could not be unaware of the practice’s anticompetitive nature. The degree of foreseeability of the practice’s anticompetitive nature should be assessed to quantify the sanction and, particularly, to reduce it as a mitigating circumstance. While the need to receive legal advice to evaluate the anticompetitive risks of a given conduct cannot exclude the foreseeability of its anticompetitive nature, the case law suggests that the novelty of the infringement or the uncertain anticompetitive nature of the conduct may lead to significant reductions of the sanction.

From a different viewpoint, the limited relevance of intent is also connected to the fact that parent companies are jointly and severally liable for antitrust infringements committed by their subsidiaries. The legal regime for corporate group liability is grounded in the concept of “undertaking”, in turn rooted in the single economic entity doctrine. Although undertakings are the addresses of Articles 101 and 102 TFEU, the concept is not defined in the Treaties or in secondary legislation. According to the case law, the term should reflect the economic reality rather than the legal one. Separate legal persons are a single “undertaking” for the purposes of competition law if they are connected from an economic and managerial perspective.

If they do not determine their own conducts on the market, subsidiaries surely form a single economic entity with the holding company. Just as a company is the only entity liable for antitrust offences committed by each of its departments, so too an “undertaking” is the only entity liable for the infringements committed by each of the legal persons by which it is composed. However, corporate group liability is controversial mainly because the Commission can hold parent companies liable even without proving that they were aware of - let alone involved in - the infringement planned or committed by their subsidiaries. Especially if parent companies hold nearly the entire capital of their subsidiaries,[3] an almost irrebuttable presumption that they influence their subsidiaries applies. In theory, parent companies may rebut the presumption by submitting evidence that the subsidiaries act autonomously of, and receive no instructions from, the parent companies. Such requirement of proof, however, amounts to a so-called probatio diabolica: demonstrating the independence of a subsidiary means refuting an abstract possibility, direct evidence of its autonomy on the market being impossible to submit.

Unsurprisingly, there are virtually no cases where parent companies succeeded in arguing that they did not influence a wholly owned subsidiary. The liability of purely financial investors (such as private equity firms) under the presumption at stake exemplarily demonstrates the rigidity of the approach. Indeed, even the fact that the only economic activity performed by a company was that of acquiring distressed companies to restructure and sell them out has been considered by the ECJ as a circumstance supporting - rather than denying - the exercise of decisive influence over the target by the acquiring company. The very same approach is applied also when subsidiaries disregard the explicit instructions received by their parent companies "not to participate in any anticompetitive practices in a given market”.

Although controversial, the regime of corporate group liability has been devised to prevent undertakings from escaping antitrust liability by setting up subsidiaries to which they “assign the task” to breach competition rules in the interest of the group.[4] With regard to sanctions, moreover, the Commission’s ability of recovering is enhanced: parent companies are liable even if the subsidiary becomes insolvent or is liquidated. The Commission is also able to impose higher sanctions increasing the deterrent effect of Articles 101 and 102 TFEU: the 10% turnover cap is applied to the overall turnover of the group rather than to the lower turnover of the single subsidiary.

The single economic entity doctrine has many other implications. For example, the risk of incurring in the aggravating circumstance of - indirect - recidivism significantly increases. Since antitrust infringements committed by any entity of the group are ascribed to the parent company, the latter qualifies as a repeat offender even if the relevant offences were committed solely by two (or more) of its subsidiaries and no finding of infringement was made against the holding.

Strictly related to such theory is also the possibility to apply EU competition law extraterritorially and fine foreign companies if they breach Articles 101 and 102 TFEU. Even when parent companies are based abroad, the fact that a subsidiary is established in a Member State is enough for the Commission to assert its jurisdiction and to sanction the foreign holdings.150

  • [1] Cf. section 3. 2 P. Akman, ‘The Role of Intent in the EU Case Law on Abuse of Dominance’ (2014) 39 European Law Review 316; M.E. Stucke, ‘Is Intent Relevant?’ (2012) 8 Journal of Law, Economics and Policy 801; P.L. Parcu, ‘Considerazioni sulla rilevanza del movente nella valutazione delle vio-lazioni antitrust’, in A. Raffaelli (ed.), Antitrust Between EU and National Law IX (Bruylant, 2011) 289; A. Bavasso, ‘The Role of Intent under Article 82: From Fishing the Turkeys to Spotting Lioness in Regent’s Park’ (2005) 26 European Competition Law Review 616. 3 S. Bastianon, Il risarcimento del danno antitrust tra esigenze di giustizia e problemi di effi-cienza. Prime riflessioni sul Libro verde della Commissione (2006) 8 Mercato, Concorrenza e Regole 321,336. 4 l
  • [2] ings the decisions autonomously taken by algorithms (L. Calzolari, ‘La collusione fra algoritmi nell’era dei big data: 1’imputabilita alle imprese delle “intese 4.0” ai sensi dell’art. 101 TFUE’ (2018) Medialaw 219). W9C-681/11, Schenker, ECLI:EU:C:2013:404. 2 T-46O/13, Sun Pharmaceutical, ECLI:EU:T:2016:453. 3 T-470/13, Merck, ECLI:EU:T:2016:452. 4 C-62/86, AKZO Chemie, ECLI:EU:C: 1991:286 with regard to an abuse of a dominant position as a result of the application of “predatory prices”. 5 niSee A. Jones, ‘The Boundaries of an Undertaking in EU Competition Law’ (2012) 8 Eur. Comp.] 301; O. Odudu, 'The Meaning of Undertaking within Article 101’ (2005) 7 CYELS 209; W.P.J. Wils, ‘The Undertakings as Subject of E.C. Competition Law and the Imputation of Infringements to Natural or Legal Person’ (2000) 25 European Law Review 99. 6 O. Odudu and D. Bailey, ‘The Single Economic Entity Doctrine in EU Competition Law’ (2014)51 Common Market Law Review 1721. 7 170/83, Mario Andreoli, ECLI:EU:C: 1984:271, para. 11. 8 The “authors of the Treaties chose to use the concept of an ‘undertaking’ to designate the
  • [3] perpetrator of an infringement of competition law [...] and not other concepts such as that of ‘companies or firms’ or 'legal persons’, used in particular in Article [54 TFEU]” (C-231/11 P to C-233/11 P, Siemens AG, ECLI:EU:C:2014:256, para. 41). n/T-299/08, Elf-Aquitaine, ECLI:EU:T:2011:217;C-508/11 P, Eni, ECLI:EU:C:2013:289. 2 C- 97/08 P, Akzo-Nobel, ECLI:EU:C:2009:536 para. 60. 3 This critics, however, has been dismissed by the case-law (T-168/05, Arkema, ECLLEU: T:2009:367 para. 82). 4 One of the few exceptions is T-24/05, Alliance One International, ECLI:EU:T:2010:453. 5 Commission Decision of 2 April 2014, AT.39610 - Power Cables. 6 T-395/09, Gigaset, ECLI:EU:T:2014:23. 7 Indeed, “the existence of an express instruction [...] not to participate in any anticompeti 8 tive practices [...] can be a strong indication of the actual exercise of decisive influence by the 9 parent over the subsidiary” (C-155/14 P, Evonik Degussa, ECLLEU: C:2016:446 para. 40).
  • [4] This can include the task to manage the whole group’s sales with the aim that the subsidiary enters into a cartel with the parent company’s competitors. 2 The ECJ recently extended the scope of application of this principle to private enforcement, clarifying that damages can be claimed against successors of undertakings (C-724/17, Skanska, ECLI:EU:C:2019:204). 3 Such possibility has been only partially limited by the recent case law of the ECJ, according to which “where the liability of a parent company is purely derivative of that of its subsidiary and in which no other factor individually reflects the conduct for which the parent company is held liable, the liability of that parent company cannot exceed that of its subsidiary” (C-597/13 P, Total, ECLI:EU:C:2015:613, para 38; C-286/11 P, Tomkins, ECLI:EU:C:2013:29 para. 43). 4 X2‘ E.g., since joint liability applies to undertakings, the Commission cannot determine the internal division of the sanction between the legal entities composing the undertaking (C-625/13 P, Villeroy & Boch, ECLI:EU:C:2017:52; C- 247/11 P and C-253/11 P, Areva, ECLI:EU:C: 2014:257). 5 12sC-93/13 P and C-123/13 P, Versalis, ECLI:EU:C:2015:150. 6 48/69, Imperial Chemical, ECLI:EU:C:1972:70. 1,0 F. Munari, ‘Sui limiti internazionali all’applicazione extraterritoriale del diritto europeo della concorrenza’ (2016) RD I 32; L. Calzolari, M.G. Buonanno, ‘The Relations between the European Union and the Swiss Confederation in the Antitrust Field: between Extraterritoriality and the Recent Agreement Concerning Cooperation on the Application of their Competition Laws’, in V. Salvatore (ed.), The Free Movement of Persons between Switzerland and the European Union (Giappichelli, 2016) 55; J. Scott, ‘The New EU “Extraterritoriality”’ (2014) 51 Common Market Law Review 1343; M.M. Dabbah, International and Comparative Competition Law (Cambridge University Press, 2010); E. Elhauge and D. Geradin, Global antitrust law and economics (Foundation Press, 2007).
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