Global menu

Our global pages

Close

Parent company's liability for a subsidiary's breach of competition law

  • Czech Republic
  • Competition, EU and Trade

20-12-2021

The Court of Justice of the European Union delivered a judgment in early October ruling on a preliminary question from the Provincial Court of Barcelona concerning the extension of liability for infringements of Article 101 TFEU (prohibition of agreements that eliminate/restrict/disrupt competition) from a parent company to a subsidiary. The CJEU defined an "undertaking" within the meaning of Article 101 TFEU as an economic unit which, although legally composed of several entities with separate legal personalities, is a single entity within which there is joint and several liability between the various entities. This means that if two conditions are met, i.e. (i) there is at least one entity within the group that has infringed Article 101 TFEU and this has been decided by the Commission or a national court, and (ii) the parent company carries out activities related to the subsidiary, the responsibility of any entity in the group can be attributed, and not – as has been the case so far – only to the parent company for the activities of its subsidiary.