On March 14, 2019, the ECJ held that the determination of persons liable for damages for an EU competition law infringement is governed by EU law, not national law. The ECJ clarified that an acquirer company may be held liable for private damages caused by a cartel participant even after the cartel participant was subsequently liquidated, provided that the acquirer took over the assets that constituted the business. The ECJ agreed with Advocate General Wahl that the principle of economic continuity should apply not only in public, but also in private antitrust enforcement.
The case arose from a reference for a preliminary ruling by the Finnish Supreme Administrative Court (the “Supreme Court”) concerning a cartel in the Finnish asphalt market between 1994 and 2002.
Skanska, Asfaltmix, and NCC Industry, had each acquired a participant of the asphalt cartel in 2000 (Sata-Asfalti, Asfalttineliö, and Interasfaltti, respectively). After the acquisition, the cartel participants’ legal entities were liquidated and their businesses were transferred to their respective parents. In its 2009 decision, the Supreme Court applied the principle of economic continuity and imposed administrative fines on the parent companies, i.e. Skanska, Asfaltmix, and NCC Industry.
Subsequently, a customer brought an action for follow-on damages against the addressees of the Supreme Court judgment in the administrative case, which included Skanska, Asfaltmix, and NCC Industry. The Finnish district court concluded that the same principles should apply to the attribution of liability for private damages and for fines imposed by a competition authority. The Helsinki Court of Appeal disagreed on the grounds that, under Finish law, civil liability attaches only to an entity that committed the infringement. In this case it meant that Skanska, Asfaltmix, and NCC Industry, as distinct legal entities, could not be held liable for the harm caused by the legal entities that participated in the cartel, where those entities had already been dissolved. In turn, the Supreme Court asked the ECJ whether (i) Finnish civil liability rules or EU competition law principles should apply in private damages actions; and (ii) if EU law was applicable, whether the successor companies should be liable for private damages even where they themselves, as legal entities, did not participate in the infringement.
The ECJ’s findings
The ECJ found that—contrary to the European Commission’s view that it was a question of national law—EU law must apply to the attribution of liability for private damages because Article 101 TFEU has direct effect, creating legal consequences between individuals. The ECJ noted that although the Damages Directive is silent on which entities are to be held liable for harm caused by an infringement of EU competition law, it specifies that those are the ‘undertakings’ which committed the infringement. In this respect, the ECJ recalled that under Article 101 TFEU the concept of ‘undertaking’ covers any entity engaged in an economic activity and may, in fact, consist of several persons, natural or legal. Therefore, under EU law, a legal or organizational change—including liquidation—does not necessarily create a new undertaking, free of liability for the predecessor’s anticompetitive conduct. As explained in Advocate General Wahl’s opinion, liability attaches to business assets, rather than to a particular legal entity. Hence, the successor company is considered to take over both the cartel participant’s assets and liabilities, including its liability for EU law violations.
The ECJ held that the concept of ‘undertaking’ in public and private enforcement of EU competition law should be identical. On the basis of prior case law in the context of public enforcement, this means that an acquirer of assets may be held liable for the seller’s previous infringement of EU competition rules if the seller has ceased to exist. In the present case, the ECJ concluded that the acquirer of the legal entities involved in the cartel should also be liable for civil damages caused by these entities, even if they were liquidated subsequently, assuming that the acquirer continued to operate the assets, and regardless of whether the purpose of liquidating the entities was to escape liability.
The Skanska judgment demonstrates the ECJ’s willingness to strengthen private enforcement of competition rules. The judgment also highlights the importance for acquirers to conduct comprehensive due diligence prior to entering into M&A agreements, including in particular asset deals.
 Skanska Industrial Solutions and Others (Case C-724/17) ECLI:EU:C:2019:204 (“Skanska”).
 Skanska Industrial Solutions and Others (Case C-724/17), opinion of Advocate General Wahl, ECLI:EU:C:2019:100.
 Directive No 2014/10 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, OJ 2014 L 349/1 (“Damages Directive”).
 Skanska Industrial Solutions and Others (Case C-724/17), opinion of Advocate General Wahl, para. 80, ECLI:EU:C:2019:100.
 See, e.g., SNIA v Commission (Case C-448/11 P) ECLI:EU:C:2013:801, para. 25.