Full-Function Joint Ventures – Liability of the Parent Companies
News    ·   22-10-2013

AUTHOR: Ron Galea Cavallazzi

The European Court of Justice has recently confirmed the possibility to attribute liability to the parents of a full function joint venture, following the joint venture’s participation in a cartel (The Dow Chemical Company v European Commission, 26 September 2013).

The European Court of Justice upheld the General Court’s decision that where the Commission demonstrates that the parent companies have exercised decisive influence over the joint venture, the liability for the unlawful conduct of an equally owned joint venture can be imputed to its parent companies.

The fact that the joint venture is full-function, and therefore autonomous in the context of merger control regulations, does not imply that it is also autonomous in adopting strategic decision, or that it is not under the ‘decisive influence’ of its parent companies for the purposes of competition law.

For more information on this topic please contact Ron Galea Cavallazzi.

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