Liability of the undertaking in antitrust litigation: presumption of decisive influence also applies in civil proceedings according to AG opinion and Amsterdam District Court

In the dispute between Macedonian Thrace Brewery (“MTB”) against Heineken and its Greek subsidiary Athenian Brewery (“AB”), AG Kokott has delivered an important opinion on the application of the presumption of decisive influence in the context of a jurisdictional analysis under the recast Brussels I Regulation (“Brussels I”). The three key take aways from this opinion are:

1. The presumption of the exercise of decisive influence of a parent company with 100% or almost 100% of the shares of a subsidiary, which presumption applies in the public enforcement of EU competition law, should also be applicable in the private enforcement setting.

2. There is no place for the rebuttal of the presumption in the jurisdictional phase, this is for the merits phase of the proceedings.

3. The (presumed) decisive influence of a parent company over its subsidiary constitutes a strong indication that a close connection exists between antitrust damages claims against the parent company and the subsidiary for the purposes of establishing jurisdiction under Article 8(1) of Brussels I. Save for exceptional cases in which a forum is artificially created, no additional substantiation is required to bring a claim against the subsidiary and the parent company in the court district where the parent company is established.

As a result, an antitrust claim against a parent company and a subsidiary can generally be brought before the court district of the parent company. In this case, this would mean that MTB could bring a combined claim against the Greek company AB and its Dutch parent company Heineken before the district court of Amsterdam (the court district where Heineken is established). 

Pending the preliminary reference to the ECJ, the proceedings on the merits against Heineken and AB have continued before the Amsterdam District Court. On 23 October 2024, the District Court ruled that Heineken is jointly and severally liable for AB’s infringement, as part of the same undertaking as AB.

Background of the case

The Greek competition authority (Hellenic Competition Commission) found that AB had infringed Article 102 TFEU by imposing exclusivity on the distribution and supply of beer products in the Greek beer market, thereby limiting its competitors’ ability to compete. Competitor MTB alleged that it had suffered damages as a result of this infringement and subsequently sued AB and parent company Heineken in the Netherlands.

Importantly, Heineken holds approximately 98.8% of the shares in AB. MTB argued on this basis that Heineken exerted “decisive influence” on AB and could be held jointly and severally with AB.

Legal framework

According to the main jurisdictional rule under Article 4 of Brussels I, a single defendant may be sued in the place in which it is domiciled. In the case of multiple defendants, Article 8(1) of the Brussels I provides that the action may be brought before the courts of the countries where any one of them is domiciled (‘the anchor defendant’), so long as the claims are so “closely connected” that it is expedient to hear and determine them together. Whether or not such a close connection exists, is to be assessed by the national courts of the Member States. The rationale behind this requirement is that it serves to avoid irreconcilable judgements when separate proceedings are initiated.

In a public enforcement context, the ECJ has ruled in the Akzo judgement that a parent company that holds 100% of the shares of a subsidiary is able to exercise decisive influence on its subsidiary and a rebuttable presumption applies that this decisive influence has actually been exercised. The presumption of decisive influence has later also been held applicable when there is a shareholding of nearly 100%, to intermediate holding companies and to parent companies that can exercise (nearly) 100% of the voting rights.  In these situations, the parent company and the subsidiary are considered part of the same undertaking and can be held jointly and severally liable of an infringement committed by the subsidiary.

Supreme Court’s referral

The Dutch Supreme Court’s referred, in summary, the following preliminary questions to the CJEU:

• Does the presumption of decisive influence, which applies in competition law, also apply when assessing jurisdiction under Article 8(1) Brussels I?
• If so, how should the legal test of Kolassa and Universal Music be applied? Is there jurisdiction even if the existence of decisive influence cannot be excluded a priori?

In Kolassa and Universal, the CJEU ruled that an obligation to conduct a comprehensive taking of evidence in the jurisdictional phase risks prejudicing the assessment of the substance. At the same time, the court should be able to examine its international jurisdiction in light of all the information available to it, including, where appropriate, the defendant’s allegations. The Supreme Court, therefore, wants to know from the CJEU to what extent a defendant should be able to try to rebut the Akzo presumption (if applicable) in the preliminary phase.

Opinion of AG Kokott

Regarding the first referred question, AG Kokott is of the opinion that when a parent company holds (nearly) all of shares in its subsidiary, “such a strong indication of the existences of a close connection” is present that “no further evidence of the existence of that close connection is usually required” for adopting jurisdiction under Article 8(1) of Brussels I. This is because it is assumed that the parent company exercises decisive influence on the very economic activity that resulted in the infringement, for which both companies can then be held jointly and severally liable. Only in rare instances, when there is adequate evidence that the claim is evidently unfounded, artificial or devoid of any real interest to the claimant at the time when it is brought, can an exception to jurisdiction be made.

Because previous case-law has shown that it is extremely hard to provide evidence capable of rebutting the presumption of decisive influence, AG Kokott notes that it should not be necessary to examine that evidence in the jurisdictional phase of the proceedings. It should also not be required to examine whether the decisive influence has actually been exercised. Both can be examined in the merits phase of the proceedings to ensure that courts can adopt jurisdiction with relative ease.

Proceedings on the merits: District Court rules that Heineken is liable

Pending the preliminary reference to the ECJ, the proceedings on the merits against Heineken and AB have continued before the Amsterdam District Court. On 23 October 2024, the District Court ruled that Heineken is jointly and severally liable for AB’s infringement, as part of the same undertaking as AB. The court comes to this conclusion by applying the presumption of decisive influence, as advised by Advocate General Kokott. The Amsterdam District Court did not consider it necessary to await the judgment of the ECJ, as the law is sufficiently clear on this point, and Heineken failed to rebut the presumption of decisive influence. The District Court judgment can be found here (in Dutch).

Observations

The opinion is good news for parties that have been injured by a competition law infringement, as it increases their ability to find an appropriate forum for antitrust claims. AG Kokott stresses this optionality, and notes that there is no requirement to sue in the venue with the closest link: a close link is sufficient for jurisdiction under Brussels I.

Kokott’s view that the presumption of decisive influence should be applied in private enforcement also makes sense. A parent company that owns all, or almost all, of the shares of a subsidiary will virtually always have control over that subsidiary. This was also the reason for the introduction of the presumption in public enforcement.

With the test that AG Kokott proposes, courts will in many instances be able to decide more easily whether they have jurisdiction. If the ECJ decides to follow the opinion, many cumbersome procedural discussions about jurisdiction could be avoided, which will expedite antitrust damages proceedings.

This will not be the last case before the ECJ about this topic as two other references from the Netherlands are still pending. These are the Italian Cardboard case (C-673/23), which also concerns parental liability, and the Power Cables case (C-672/23), which is about subsidiary liability (Lindenbaum partners Stefan Tuinenga and Damien Berkhout have acted for the claimants in these cases).

Contact Lindenbaum to learn more

The attorneys at Lindenbaum have been litigation counsel in in several of the leading antitrust actions in the Netherlands and Europe. Do not hesitate to contact one of our experts.