Case C‑595/18 P

The Goldman Sachs Group Inc.

European Commission

Judgment of the Court (Second Chamber), 27 January 2021

(Appeal – Competition – Agreements, decisions and concerted practices – European market for power cables – Market allocation in connection with projects – Regulation (EC) No 1/2003 – Article 23(2) – Attributability of unlawful conduct of one company to another company – Presumption of actual exercise of decisive influence – Entity controlling 100% of the voting rights associated with the shares of another company)

Competition – EU rules – Infringements – Attribution – Parent company and subsidiaries – Economic unit – Criteria for assessment – Presumption of decisive influence exercised by parent company over its wholly owned or almost wholly owned subsidiaries – Parent company in a similar situation – Parent company able to exercise all the voting rights associated with its subsidiary’s shares

(Art. 101 TFEU; Council Regulation No 1/2003, Art. 23(2))

(see paragraphs 31-36)
Competition – EU rules – Infringements – Attribution – Parent company and subsidiaries – Economic unit – Criteria for assessment – Presumption of decisive influence exercised by parent company over its wholly owned or almost wholly owned subsidiaries – Rebuttable – Combination of the presumption that a parent company exercises decisive influence over its wholly owned or almost wholly owned subsidiaries with other evidence

(Art. 101 TFEU)

(see paragraph 40)
Competition – EU rules – Infringements – Attribution – Parent company and subsidiaries – Economic unit – Criteria for assessment – Exercise of decisive influence over the conduct of the subsidiary which may be inferred from a set of indicia relating to the economic, organisational and legal links with its parent company – Circumstances allowing the existence of decisive influence to be established – Actual control of the board of directors of the subsidiary – Directors sitting on the board of a company who are connected to the other company through advisory services or consultancy agreements

(Art. 101 TFEU)

(see paragraphs 93-95)

Résumé

The Goldman Sachs Group (‘the appellant’) is a company established in the United States. It is an investment bank which operates in all the major financial centres around the world. From 29 July 2005 to 28 January 2009 (‘the infringement period’), it was the (indirect) parent company, through certain funds which it had established, of Prysmian SpA and its wholly owned subsidiary, Prysmian Cavi e Sistemi Srl, two companies established in Italy, which together form the Prysmian group, one of the leading businesses worldwide in the submarine and underground power cables sector. While its shareholding in Prysmian was initially 100% of the shares, it subsequently decreased to 84.4% when part of Prysmian’s capital was floated on the stock exchange on 3 May 2007. ( 1 )

Following an investigation initiated in 2008, the Commission, by decision of 2 April 2014 ( 2 ) (‘the decision at issue’), (i) found that there had been a single and continuous infringement of Article 101 TFEU in the ‘sector for (extra) high voltage underground and/or submarine power cables’ consisting in an allocation of the worldwide market between the main European, Japanese and South Korean producers concerned and (ii) imposed fines for their participation in the cartel at issue.

The appellant was found liable as Prysmian’s parent company during the infringement period, and a distinction was drawn between the situation that prevailed until a part of Prysmian’s capital was floated on the stock exchange and the subsequent situation. Thus, as regards the first period, the Commission found that the appellant had remained in a situation similar to that of a sole and exclusive owner, despite the divestments of shares, so that it could be presumed, in accordance with the case-law principles established by the Court of Justice, ( 3 ) that it had exercised decisive influence over Prysmian’s market conduct. Furthermore, as regards the entire infringement period, the Commission relied on a body of evidence revealing the economic, organisational and legal links between the appellant and Prysmian in order to conclude that such decisive influence had actually been exercised.

Disputing the approach followed by the Commission in order to impute to it liability for the infringement at issue, Goldman Sachs brought an action before the General Court (i) for annulment of the decision at issue in so far as it concerned it and (ii) for the reduction of the amount of the fine which had been imposed on it; that action was dismissed in its entirety by judgment of General Court of 12 July 2018. ( 4 ) In its judgment of 27 January 2021, the Court of Justice dismisses the appeal lodged by Goldman Sachs against the judgment of the General Court. In that context, the Court of Justice provides further clarifications on the conditions required for the liability of parent companies to be incurred where their subsidiaries have infringed the competition rules.

Findings of the Court of Justice

In the first place, the Court of Justice holds that the General Court was fully entitled to take the view that, where a parent company holds all the voting rights associated with its subsidiary’s shares, the Commission is entitled to rely on a presumption that the parent company actually exercises decisive influence over its subsidiary’s market conduct. The Court of Justice recalls that the presumption of actual exercise of decisive influence as enshrined in its case-law is intended to enable the parent company to be held liable for the conduct of its subsidiary, unless it is able to demonstrate that the subsidiary acts independently on the market. Thus, the implementation of that presumption does not require the Commission to produce indicia capable of establishing the actual exercise of such influence. In that regard, the Court of Justice specifies that it is not the mere holding of all or virtually all the capital of the subsidiary in itself that gives rise to the presumption, but the degree of control of the parent company over its subsidiary resulting from this. Where a parent company holds all the voting rights associated with its subsidiary’s shares, without however being the sole shareholder of that subsidiary, it is able to exercise decisive influence over the conduct of the latter. Observing that it was not disputed that the appellant held all the voting rights associated with its subsidiary’s shares, the Court of Justice concludes that the criticism made of the General Court in the appeal for having treated such a situation in the same way as that of a company holding all or virtually all of the capital of its subsidiary is not justified in the light of the conditions for applying the presumption of actual exercise of decisive influence.

In the second place, as regards the examination of the elements on which the Commission relied in order to conclude that the appellant had exercised decisive influence over its subsidiary’s market conduct during the entire infringement period, the Court of Justice notes that the Commission relied, as regards the first period, on two grounds in order to hold the appellant liable for the infringement, namely a presumption of actual exercise of decisive influence, on the ground that the appellant held all the voting rights associated with Prysmian’s shares, and its conclusion that the appellant had actually exercised such influence over Prysmian. Given that the Commission was entitled to rely on such a presumption, as is apparent from the foregoing, and since the General Court did not err in law in finding that the appellant had not succeeded in rebutting that presumption, the Court of Justice considers that the appeal is ineffective in so far as it concerns the General Court’s findings as regards the second ground on which the Commission relied in order to hold the appellant liable for the infringement at issue in that period.

As regards the period after the flotation of a part of Prysmian’s capital on the stock exchange, the Court of Justice holds that the General Court did not err in law in finding that personal links between the parent company and its subsidiary other than those resulting from an accumulation of posts could be relevant in that regard, since such links are capable of establishing the existence of a single economic entity. The General Court was therefore right to accept that personal links relating to the exercise, by the director of a company, of consultancy activities for the other company are relevant.

Lastly, the Court of Justice observes that no reduction of the fine was granted to Prysmian on account of the unsuccessful nature of the appeal lodged by the companies in that group, ( 5 ) with the result that the appellant was not eligible for such a reduction. Consequently, the appeal is dismissed in its entirety.

( 1 ) During the infringement period, the period prior to the floatation on the stock exchange of part of Prysmian’s capital will be referred to below as ‘the first period’.

( 2 ) Commission Decision C(2014) 2139 final of 2 April 2014 relating to a proceeding under Article 101 [TFEU] and Article 53 of the EEA Agreement (Case AT.39610 – Power cables).

( 3 ) Judgment of 10 September 2009, Akzo Nobel and Others v Commission (C‑97/08 P, EU:C:2009:536, paragraph 58). See also judgments of 24 June 2015, Fresh Del Monte Produce v Commission and Commission v Fresh Del Monte Produce (C‑293/13 P and C‑294/13 P, EU:C:2015:416, paragraph 75 and the case-law cited), and of 28 October 2020, Pirelli & C. v Commission (C‑611/18 P, not published, EU:C:2020:868, paragraph 68 and the case-law cited).

( 4 ) Judgment of 12 July 2018, The Goldman Sachs Group v Commission (T‑419/14, EU:T:2018:445).

( 5 ) Judgment of 12 July 2018, Prysmian and Prysmian Cavi e Sistemi v Commission (T‑475/14, EU:T:2018:448), upheld by the judgment of 24 September 2020, Prysmian and Prysmian Cavi e Sistemi v Commission (C‑601/18 P, EU:C:2020:751).