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ECJ: Recidivism in antitrust infringements

The European Court of Justice (“ECJ”) reconfirmed the application of the principle of economic continuity in the joined cases C-93/13 P, European Commission vs Versalis SpA and Eni SpA and C-123/13 P, Versalis SpA and Eni SpA vs European Commission. Moreover, it mainly clarified the criteria for establishing the liability of repeat offenders as such.

The European Commission (“Commission”) issued a decision on 05.12.2007, in which Polimeri Europa SpA (“Polimeri”) was held liable for the participation in the chloroprene rubber cartel. Versalis SpA (“Versalis”) is the universal successor of Polimeri, which was a subsidiary of EniChem Elastomeri Srl (“EniChem”). EniChem was owned by ENI SpA (“ENI”) to more than 99%.

Versalis was already the third subsidiary of ENI to commit an infringement of competition law. Accordingly, the Commission adopted a fine for Polimeri and ENI of EUR 132 Mio. including an increase of 60% to the basic amount of the fine due to recidivism.

The Court confirmed the decision of the Commission only in part. Regarding the repeat infringement, it held that the increase should be 50% only instead of 60% and reduced the multiplier used in the calculation of the fine from 1.4 to 1.2. The reduction of the fine would be justified as only Versalis, but not ENI could be held liable as a repeat offender.

The ECJ confirmed the original decision of the Commission regarding liability of Versalis. However, regarding the joint and several (repeated) liability of ENI the ECJ stated that recidivism can be assumed with different subsidiaries, if the infringing unit had already formed an economic unit with the offender at the time of the previous infringement. Furthermore, it held that it is not necessary for the parent company to have been a specific addressee of the previous decision. The ECJ also stated that the Commission has to prove that the company concerned by the second infringement already exercised, at the time of the first infringement, a decisive influence over the subsidiary involved in the first infringement.

Moreover, the ECJ confirmed the rest of the judgement of the Court.

Authors:

Dr. Christina Hummer
Ori Kahn