EU cartel fines: German Federal Court decides on the internal liability for a jointly and severally imposed cartel fine

The German Federal Court of Justice (FCJ) had to rule on the question to which extent a former parent company and its subsidiaries respectively are internally liable for a fine that had been imposed on them jointly and severally by the European Commission. This question was relevant in the specific case because at the time of the infringement established by the Commission, the parent company and the subsidiaries formed a single economic unit (and were held jointly and severally liable for payment of the fine by the Commission), but later became legally independent (and the parent company wanted to be indemnified by its subsidiaries). The lower courts had fully rejected the claims of the parent company.

With its decision of 18 November 2014 the FCJ’s Antitrust Senate stated that national courts have to take into account a series of factors in order to internally allocate a fine between joint and several debtors. According to the court a complex assessment of the individual case based on the companies’ internal relationship is necessary. With its reasoning the FCJ is implementing the findings of the European Court of Justice, which stated in, inter alia, the case Siemens Österreich (judgement of 10 April 2014, joined cases C-231/11 P to C-233/11 P) that it is the responsibility of the national courts to decide on compensation claims between joint and several debtors and that the European Commission is neither authorized nor obliged to determine such liability shares.

With its decision at hand, the FCJ referred the case back to the Higher Regional Court of Munich (OLG) to decide upon the internal liability for the jointly and severally imposed fine. It emphasized that account must be taken of factors such as causation and fault and to the question which parties gained revenues and other benefits from the cartel infringement. Moreover, the FCJ stressed that when deciding the case on the basis of national law the OLG also has to consider mandatory principles of European Union law. It is therefore likely that it plays a significant role that the European Commission pursues the effects of deterrence and prevention by imposing fines also on parent companies and that compensating the parent company via a national civil action could undermine these effects.

The details of the judgement and its specific implementation by OLG remain to be seen. It is, however, already certain that the question of how a fine is to be split between joint and several debtors liable for its payment will have significant importance in practice and will continue to be a disputed issue in individual cases.

The press release of the German Federal Court of Justice is available here.