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Competition Law

Analysis - debate - current awareness

02 FEB 2012

General Court dismisses appeals against chloroprene rubber cartel decision

On 2 February the General Court dismissed appeals by DuPont, Dow and Denka against the European Commission's decision to hold them accountable for the infringing activities (ie participation in the chloroprene rubber cartel) of a joint venture over which they exercised joint control.

The Commission's decision is in line with established case-law on parental liability whereby parent companies that exercise decisive influence over the business strategy of a subsidiary, may be held liable for the latter's infringing activities.

Interestingly, the court rejected Denka's argument such that by applying the 2006 Fining Guidelines instead of the previous 1998 Guidelines, the Commission had breached the principles of legal certainty and non-retroactivity. The court held that the Commission may at any time raise the level of fines to ensure the effective implementation of its competition policy, and that undertakings cannot therefore claim legitimate expectation that the Commission will not exceed the level of fines previously imposed in a particular case, or that it will use a particular method to calculate fines. Further, the 2006 Fining Guidelines use criteria that were also taken into account under the 1998 Guidelines.

Whilst the court held that the adoption of guidelines capable of modifying the Commission's competition policy in relation to fines may in principle fall within the scope of the principle of non-retroactivity, this principle does not preclude the application of guidelines which have the effect of raising the level of fines imposed for infringements committed prior to their adoption, provided that the policy they implement was, as in this case, reasonably foreseeable at the time of the infringement.

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