Publication

Introduction

Companies are occasionally left scratching their heads as to the far-reaching possibilities associated with a claimant’s ability to forum shop for damages claims in certain jurisdictions, as a result of an infringement carried out by a group company in which they had no knowledge or did not participate in.

They therefore (carry out a misconceiving) attempt to consider the various options available in order to prevent potential claims being guided towards more favourable jurisdictions with no avail.  Potential claimants are in the driver’s seat concerning such damages claims and naturally opt for the most suitable or favourable jurisdiction to readily hear their claim.  Defendants, on the other hand, have to prepare for each possible avenue and react accordingly.  There are those Member States courts that have attracted such claims (e.g., the Netherlands) due to the nature of being more claimant friendly and others which do not yet meet the mark of trekking down the pathway for a successful claim.  Across the Member States, there are varying evidentiary bars to satisfy, estimating and calculating the damages suffered, differing limitation periods and appeal processes (with the court process lasting years in some places), as well as attracting opportunities for litigation fundings.

Within Latvia, follow-on cartel damages claims are usually heard where the defendant resides or where the infringement occurred.  However, the more broader EU rules allow for a defendant domiciled in a Member State of the European Union may be sued whereby the defendant “is one of a number of defendants, in the court where any of the other defendants is domiciled, provided that the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings”.[1]

Over the last few years, we have seen a significant uptake in follow-on damages claims across the EU Member States, including Latvia.  These cases have either resulted in a national court having an anchor defendant (establishing jurisdiction for all other defendants) or claimants bringing claims against separate defendants in the courts covering a number of different jurisdictions (leaving an array of different avenues for determining local jurisdiction). There has also been a momentous development of the European courts’ and national case-law which has provided extremely valuable guidance on the stretch of the applicable EU rules and legal principles.  National courts have struggled at times getting to grasp how to approach these claims from different angles resulting in varying approaches in such cases.

The European Court of Justice (hereinafter, the “CJEU”) has been stepping in from time-to-time with specific questions posed by national courts.  These preliminary rulings have been helpful to a certain extent on the interpretation of certain specifics of the application of the Damages Directive and respective jurisdictional questions stemming from Regulation No. 1215/2012.[2]

One thing, however, is consistently underlined in the CJEU’s case-law, potential claimants are not to be hindered from accessing the best possible recourse in recovering damages as a result of an infringement whereby they have suffered an evidenced loss.

Athenian Brewery case

In its recent judgement, dated 13 February 2025, the CJEU provided clarifications concerning the issue of jurisdiction in a follow-on damages claim as a result of a request for a preliminary ruling from the Hoge Raad der Nederlanden (Supreme Court of the Netherlands).[3] In essence, the request posed the question as to whether a national court can hold jurisdiction over a claim involving both a parent company and its subsidiary (joint and several liability) on the rebuttable presumption of the parent company’s influence over its subsidiary, under the interpretation of Article 8(1) of Regulation No. 1215/2012.[4]

     (a) Brief factual background

By way of brief factual background, Athenian Brewery SA (hereinafter, “AB”) and Macedonian Thrace Brewery SA (hereinafter, “MTB”) are breweries established in Greece and operating on the Greek beer market. AB is a part of the Heineken group (98.8% of the shares in the capital of AB between September 1998 and 14 September 2014), the parent company of which, Heineken, has its registered office in Amsterdam (the Netherlands). Accordingly, Heineken sets the strategy and objectives of the Heineken group and does not itself carry on any operational activities in Greece.

By way of a decision on 19 September 2014, the Epitropi Antagonismou in Greece (hereinafter, the “Competition Commission”) found that AB had abused its dominant position on the Greek beer market (during the period the Heineken group held 98.8% of the shares in AB) and held to be a single continuous infringement of Article 102 TFEU (and the Greek statutory equivalent). Notably, while MTB had asked the Competition Commission to include Heineken in its investigation, it was stated in the wording of the Competition Commission’s final decision there was no evidence of Heineken’s direct involvement in the infringements and that the specific circumstances did not support the assumption that Heineken had “exercised a decisive influence over AB”.   Therefore, the Competition Commission did not adjudicate on the rebuttable presumption of the parent company’s decisive influence and liability.

Subsequently following the decision, MTB made an application to the rechtbank Amsterdam (the District Court, Amsterdam, Netherlands) for AB and Heineken to be held jointly and severally liable for the infringement. AB and Heineken requested for the claim to be dismissed as the Dutch court did not have jurisdiction (no close connection between the claims) to hear the claim under the respective provisions of Regulation 1215/2012.

While it has been established by the CJEU in Sumal parent companies and their subsidiaries are liable for competition law infringements committed by one of them if they form a single economic unit, the subsequent question of jurisdiction and forum shopping in such cases has been rather woolly and contested from different fronts.[5]  From the other angle, the CJEU has previously held,[6] inter alia, that actions brought against undertakings which have participated, in different places and at different times, in a single and continuous infringement, which has been established by a decision of the European Commission (not a national competition authority as is the situation in the present case), were so closely connected that it was expedient to hear and determine them together to avoid the risk of irreconcilable judgments under Article 8(1) of Regulation No. 1215/2012. The answer of bringing actions in one Member State against a defendant as a result of a national decision originating in another Member State was not therefore clear.

     (b) CJEU’s Preliminary ruling

In light of the above and following the uncertainty as to how to approach the jurisdictional question on appeal, the Hoge Raad der Nederlanden decided to stay proceedings and referred the following questions to the CJEU for a preliminary ruling to clarify the requirements of establishing a close connection between the actions (AB’s violation as a subsidiary and Heineken as the parent exercising decisive influence over AB) under Article 8(1) of Regulation No. 1215/2012.  The latter Article 8(1) stipulates that where the defendant is domiciled in a different Member State, that defendant may be sued (for damages) in the courts for the place where any one of the defendants is domiciled, provided that the claims are so “closely connected” that it is practical to hear and determine them together, avoiding the risk of conflicting judgments from separate proceedings.  Therefore, the CJEU had to provide an answer as to whether the rebuttable presumption of the parent company’s decisive influence (in this instance, holding almost all of the capital in the subsidiary) and liability fulfils the necessary close connection provided under Article 8 of Regulation No. 1215/2012.

In its ruling, the CJEU first clarified EU competition law refers to the activities of undertakings, with the result that, since the liability for damage caused by infringements of EU competition rules is personal in nature, the undertaking which infringes those rules must answer for the damage caused by the infringement.[7]  The CJEU went on to underline, “the concept of an ‘undertaking’ and, through it, that of an ‘economic unit’ automatically entail the application of joint and several liability amongst the entities of which the economic unit is made up at the time that the infringement was committed”.[8] In other words, the CJEU holds that parent companies and subsidiaries are liable for the same infringement if they constitute a single undertaking under the applicable rules, in line with the principles of foreseeability and legal certainty.[9]

The CJEU also confirmed the fact that the joint and several liability was not established in a final European Commission or national decision does not preclude the application of Article 8(1) of Regulation No 1215/2012.[10]

The CJEU further highlighted “in the specific case where a parent company holds, directly or indirectly, all or almost all of the capital of a subsidiary which has infringed the competition rules, there is a rebuttable presumption, namely the presumption of the parent company’s decisive influence and liability, that that parent company does in fact exercise a decisive influence over the conduct of its subsidiary”.[11]  The CJEU underlined the aforementioned presumption therefore also applies in the case of a claim brought by a natural or legal person as a result of a company’s participation in an infringement, brought against another company which holds all or almost all of the capital of the former.  In that regard, the CJEU holds within the context of Article 8(1) of Regulation No. 1215/2012 that the aforementioned rebuttable presumption (decisive influence of the parent company over the subsidiary) does indeed apply in such claims and as a result a close connection can be presumed (rebuttable) concerning the actions of both parent and subsidiary. In other words, the defendants can rebut the aforementioned presumption and therefore jurisdiction if they provide hard evidence the parent company did not hold directly or indirectly all or almost all of the capital of that subsidiary, or that that presumption should nevertheless be rebutted.

Finally, the CJEU emphasised that “at the stage at which international jurisdiction is determined, the court seised examines neither the admissibility nor the substance of the claim [however], only the connecting factors with the Member State in which that court is situated which are capable of providing a basis for its jurisdiction under Article 8(1) of Regulation No 1215/2012”.[12]  In other words, the national courts are able to reach a decision on jurisdiction by exclusively applying the presumption (if raised and successfully evidenced (“firm evidence”) by the claimant and not adequately rebutted by the defendant (with “firm evidence”)).[13]

Conclusion and key takeaways

In sum, the CJEU’s ruling is much welcomed for further guidance and clarity.  The court repeated its reasoning throughout which is to avoid irreconcilable judgments across the Member States. The ruling also provides added legal certainty for claimants and a further weapon in the armoury for forum shopping.

If we look at the ruling literally, the question is of course raised whether this would be applied in reverse (i.e., going after an innocent subsidiary where the parent has committed the infringement).  We will have to wait and see.

According to the CJEU, companies should “reasonably foresee” the possibilities of being sued if the parent or subsidiary has been found to have infringed competition laws.

Finally, in practice, we have seen the difficulties in rebutting the presumption of decisive influence and it is unclear what the CJEU means by “firm evidence”.  This will be tried and tested.

Should you have any questions or clarifications concerning potential damages claims, or require practical assistance with any aspect of competition laws, please reach out to a member of the VILGERTS’ Competition team.

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[1]             Refer to Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast), OJ L 351, 20.12.2012, at pp. 1–32.

[2]             Refer to Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union Text with EEA relevance, OJ L 349, 5.12.2014, at pp. 1–19.  Article 9 of the Damages Directive states: “1.Member States shall ensure that an infringement of competition law found by a final decision of a national competition authority or by a review court is deemed to be irrefutably established for the purposes of an action for damages brought before their national courts under Article 101 or 102 TFEU or under national competition law. 2. Member States shall ensure that where a final decision referred to in paragraph 1 is taken in another Member State, that final decision may, in accordance with national law, be presented before their national courts as at least prima facie evidence that an infringement of competition law has occurred and, as appropriate, may be assessed along with any other evidence adduced by the parties […]”.

[3]             Refer to Case C‑393/23, Athenian Brewery SA, Heineken NV v. Macedonian Thrace Brewery SA, 13 February 2025, ECLI:EU:C:2025:85.

[4]             Refer to Article 8(1) of Regulation 1215/2012: “A person domiciled in a Member State may also be sued: (1) where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings; […].”

[5]             Refer to Case C-882/19 Sumal v. Mercedes Benz Trucks Espana, 6 October 2021, EU:C:2021:800.

[6]             Refer to Case C‑352/13 CDC Hydrogen Peroxide, 21 May 2015, EU:C:2015:335.

[7]             Refer to Case C‑724/17, Skanska Industrial Solutions and Others, 14 March 2019, EU:C:2019:204, paragraphs 30 and 31 and the case-law cited therein.

[8]             Ibid. fn. 5 at paragraphs 43 and 44.  At paragraph 40, the CJEU also stated the concept of ‘undertaking’, within the meaning of EU competition law, which constitutes an autonomous concept of that law, cannot have a different scope with regard to the imposition of fines by the Commission under Article 23(2) of Regulation No 1/2003 as compared to actions for damages for infringement of EU competition rules.

[9]             Refer to Case C‑103/05 Reisch Montage, 13 July 2006, EU:C:2006:471, at paragraph 25.

[10]            Ibid. fn.3 at paragraphs 30-31.

[11]            Refer to Case C‑457/16 P and C‑459/16 P to C‑461/16 P Global Steel Wire and Others v Commission, 26 October 2017, EU:C:2017:819, at paragraph 84 and the case-law cited therein.

[12]            Ibid. fn.3 at paragraph 41.

[13]            Ibid. fn.3 at paragraphs 42-46.