The Parent-subsidiary Relationship in EU Antitrust Law and the AEG Telefunken Presumption: Between the Effectiveness of Competition Law and the Protection of Fundamental Rights

• Main Author: Lorenzo Federico Pace
• Format: Article
• Language: English
• Published: University of Warsaw 2014-12-01
• Series: Yearbook of Antitrust and Regulatory Studies
• Subjects: relationship between competition law and fundamental rights; concept of undertaking; parent-subsidiary relationship in corporate groups; imputability of sanctions in corporate groups; standard of reasoning of the commission
• Online Access: https://yars.wz.uw.edu.pl/images/yars2014_7_10/191.pdf
• ISSN: 1689-9024; 2545-0115

The increasingly frequent reference to the protection of fundamental rights in the application of EU antitrust law is a trend that has grown significantly alongside the reforms brought about by Regulation 1/2003. Greater attention being given to fundamental rights is evident in the development of the application of the AEG Telefunken presumption, whereby a parent company may be penalized for the antitrust infringements of its wholly-owned subsidiary on the ground that the parent and the subsidiary constitute a single economic entity, and hence a single “undertaking”. Recently, the Court of Justice has confirmed the lawfulness of that presumption. However, increasing attention is now given to the adequacy of the Commission’s reasoning, particularly when the Commission rejects arguments made by parent companies to rebut the presumption. These developments suggest that the growing importance of fundamental rights protection may under certain conditions be a limit the principle of the effectiveness of EU competition law as well as a new legal tool to rectify (as much as possible) the EC’s “conflict of interests” with regard to its two “souls”, the “prosecutor” and the “judge”.