6. Viabilidad de recursos y tiempo
11.2. Artículos y notas periodísticas
There are various cases where it seems that an undertaking is responsible for third party actions. In fact, these are the situations of personal liability where an economic entity, which may consist of several legal persons, answers for an infringement. If employees, subsidiaries or contractors are considered part of the undertaking, liability for their actions is attributed to that undertaking. Discussing the issue of liability for anti-competitive conduct of a third party requires reference to those concepts.
The first issue that will be analyzed is a violation of competition law committed by an employee. The relationship between an undertaking and a service provider may resemble that of an employer and employee with all its consequences. Well-established case law confirms that liability for an employee’s anti-competitive behavior is attributed to the employer (undertaking). It is recognized that an employee is considered part of the organizational structure of an undertaking, because he performs his duties in accordance with the requirements of the employer.4 He bears no economic risk and he does not act on his own behalf. The concept dates back to 19835 and continues to be used in recent judgments.6
The principle set out in 1983 in Musique Diffusion française states that ‘to impose on undertakings or associations of undertakings fines where, intentionally or negligently, they have been guilty of infringements, is not conditional upon action by, or even knowledge on the part of, the partners or principal managers of the undertaking concerned but upon action by a person who is authorized to act on behalf of the undertaking’. Hence, there is no need for an action on the part of the employer in order to attribute liability for an employee’s infringement to the undertaking in question, mere authorization to act on its behalf suffices. The following example illustrates the principle: if an employee exchanged confidential information with a competitor of his employer, the latter may be punished for the violations, even if it did not know that such an exchange took place. An undertaking is liable for actions of its rogue employees.
The employee performs duties under the direction of the undertaking with which he concluded an employment agreement. In this sense, the employee is integrated into the structure of the economic entity – that is, an undertaking. Therefore, any illegal conduct of an employee results in the undertaking being responsible for the violations committed by the employee, regardless of the fact whether the undertaking knew or was not aware of the anti-competitive conduct of its employee. Some guidance on how to prevent and limit employer liability is provided in paragraph 27 of Slovenská sporiteľňa:7 ‘it is settled 4 Para. 26 in judgment of 16.09.1999, Case C-22/98 Becu and Others, ECLI:EU:C:1999:419. 5 Judgment of 07.06.1983, Joined cases 100 to 103/80 Musique Diffusion française and Others
v Commission, ECLI:EU:C:1983:158.
6 The case law which confirm the validity of this concept includes: judgment of 21.07.2016,
Case C-542/14 VM Remonts, ECLI:EU:C:2016:578, para. 23–27; judgment of 14.03.2013, Case T-588/08 Dole Food Company, ECLI:EU:T:2013:130, para. 581; judgment of 16.06.2015, Case T-655/11 FSL Holdings, ECLI:EU:T:2015:383, para. 303–304; judgment of 15.07.2015, Cases T-389/10 and T-419/10 Siderurgica Latina Martin SpA, ECLI:EU:T:2015:513, para. 405–412.
7 Judgment of 07.02.2013, Case C-68/12 Slovenská sporiteľňa, ECLI:EU:C:2013:71. The
case states that a service provider is not independent if in practice it is acting as an agent or employee.
case-law that when it is established that an undertaking has participated in anti-competitive meetings between competing undertakings, it is for that undertaking to put forward evidence to establish that its participation in those meeting was without any anti-competitive intention by demonstrating that it had indicated to its competitors that it was participating in those meetings in a spirit that was different from theirs. If an undertaking’s participation in such a meeting is not to be regarded as tacit approval of an unlawful initiative or as subscribing to what is decided there, the undertaking must publicly distance itself from that initiative in such a way that the other participants will think that it is putting an end to its participation, or it must report the initiative to the administrative authorities’.
In many EU jurisdictions, parent companies are liable for antitrust violations committed by their subsidiaries. There is a presumption that if a subsidiary is 100% owned by its parent company, than it is not independent and does not form a separate entity for the purpose of incurring liability. In such case, being the sole parent company is sufficient to attribute liability because the parent influences and controls its subsidiary. Even though a subsidiary has a separate legal personality, it does not have power to make autonomous decisions. For that reason, an agreement of an anti-competitive nature concluded between a parent and a subsidiary will not raise antitrust concerns, because they are not separate entities. According to the doctrine of a single economic entity, a parent company and a subsidiary are treated as one entity for the purpose of antitrust proceedings (Moisejevas and Urbonas, 2016, p. 109–111). Anti- competitive agreements concluded within a single economic unit are not unlawful due to their nature because: the entities are not independent, they do not have market autonomy and they are not perceived as competitors. Therefore, an agreement concluded between them cannot be defined as anti- competitive (Semeniuk, 2015, p. 34). For these reasons, subsidiaries are not truly independent third parties. Their actions are considered to be the actions of the undertaking in question (parent).
It is important to note in this context that a parent company which did not participate in the cartel directly is liable for it within the limits of the infringement committed by its subsidiary – in other words, the parent’s liability cannot be more severe than that of its subsidiary. The Total SA8 case confirms this in paragraph 44 stating that ‘in a situation 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’. Moreover, it must also be recalled that there is no need for 8 Para. 44 of judgment of 19.01.2017, C-351/15 P European Commission v Total SA and Elf
a formal authorization to attribute liability to the undertaking in question if it is exercising decisive influence over the third party. If an employee or subsidiary is a formal representative of an undertaking, they can be considered part of that undertaking. In such case, it is irrelevant whether they were formally appointed.9
The Voestalpine10 judgment further explained when an undertaking and an independent contractor are treated as a single economic unit. In this case, a producer of metal products outsourced its sales to an agent on the territory of Italy, where cartel meetings were held. The agent was not authorized to sign contracts with customers, they were always concluded directly with the producer.11 It is important to note that the same agent worked also for another member of the cartel.
The court pointed out two factors that determine whether ‘two companies having a vertical relationship, such as a principal and its agent or intermediary [form] single economic unit: first, whether the intermediary takes on any economic risk and, second, whether the services provided by the intermediary are exclusive’.12 Also ‘it is necessary to ascertain whether that agent is in a position, as regards the activities entrusted to him by that principal, to act as an independent trader free to determine his own business strategy. If the agent is not in a position to act in that way, the functions which he carries out on behalf of the principal form an integral part of the latter’s activities’.13 In the presented case, the agent acted on behalf of the producer in Italy, and he did so without assuming an economic risk, which was borne by the principal and not by its agent. Regarding the second condition, the fact that the agent worked for two different undertakings is insufficient to demonstrate the agent’s commercial independence, because he was following strict instructions from the principals and bore no financial risks resulting from the contracts. However, the agent could, at the same time, be regarded as constituting a single economic unit with one of his principals, but a separate economic unit to the other member of the cartel. After all, the agent was only seemingly autonomous and he did not undertake economic risk and activities similar to those of an independent service provider. Liability for its action was attributed to the undertaking in question on the basis of the single economic entity doctrine.
9 It stems directly from para. 39 of judgment of 16.11.2011, T-78/06 Álvarez,
ECLI:EU:T:2011:673 and para. 22-23 of judgment of 22.05.2014, C-36/12 P Álvarez, ECLI:EU:C:2014:349.
10 Judgment of 15.07.2015, T-418/10 Voestalpine, ECLI:EU:T:2015:516. 11 Ibid. para. 20.
12 Ibid. para. 139. 13 Ibid. para. 163.
There are also situations when liability for a violation of Article 101 TFEU is attributed to an economic successor of the infringing entity.14 The principle of economic continuity provides that an undertaking that takes over the infringing entity after the period of the infringement may also be held liable if the infringing entity during the period of the infringement either ceased to exist or is part of the same group of companies. If that entity is transferred to an independent undertaking, there is no economic continuity (Atlee, 2016). However, this concept will not be further discussed in this paper as it mainly concerns the economic continuity principle and does not include actions of independent service providers. Still, it should be mentioned as it is another broadly understood form of liability for third party actions.
The concepts discussed in this paragraph referred to situations where an employee, a subsidiary and a contractor’s autonomy was seeming. Therefore, liability for such actions was attributed to the undertaking which exercised decisive influence over them. The Court considered that they formed a single entity for the purpose of incurring liability. Consequently, if an undertaking commits an infringement, all of the legal persons that constitute the relevant single entity are regarded as jointly and severally liable for the infringement regardless of the fact whether the parent company participated in the infringement passively or actively (indirectly or directly).