ECJ rules on parent-subsidiary liability in copper fittings cartel case

24/01/13

On Tuesday the Grand Chamber of the ECJ handed down its judgment in Commission v Tomkins, ruling on whether a parent company could take the benefit of a finding in a separate appeal by its former subsidiary reducing the period in which the subsidiary was found to have participated in a cartel.

In the case in question the parent company, Tomkins, and its former subsidiary, Pegler, were both fined for Pegler's participation in the copper fittings cartel. Both companies appealed against the Commission's findings as to the duration of Pegler's infringement, but disputed different specific periods of time. Pegler's appeal on duration was successful, and the General Court considered that it was bound to apply those findings in Tomkins' appeal, since Tomkins' liability was "strictly linked" to that of Pegler. On that basis the General Court reduced Tomkins' fine from €5.25 million to €4.25 million.

The Commission appealed, claiming in particular that the General Court had infringed the ultra petita rule set out in (among others) the Woodpulp case. The ECJ dismissed the appeal, emphasising that where the liability of a parent company for a cartel infringement is wholly derived from that of its subsidiary, and where both companies have appealed seeking a reduction of the fine on grounds of the duration of the infringement, the Court is entitled to take account of the outcome of the action brought by the subsidiary in the parent company's appeal, even if the scope of applications of the companies and the arguments relied on to contest duration are not identical.

The judgment is here.