On October 6, 2021, the Grand Chamber of the Court of Justice handed down a landmark judgment concerning the issue of downward liability in antitrust follow-on damages claims.[1] While the parental (or upward) liability doctrine has long been established,[2] for the first time, the Court of Justice shed light on whether subsidiaries can be held liable for their parents’ antitrust infringements in both public and private enforcement contexts. The ruling answered this question affirmatively, so long as the subsidiary and the parent company form part of the same undertaking.


On July 19, 2016, the Commission imposed a €2.93 billion fine on various truck manufacturers including Daimler AG for colluding on truck pricing and the costs of compliance with stricter emission rules.[3] Following the Commission’s decision, Sumal, a Spanish manufacturer of roll containers and metal containers, brought an action for damages against Daimler AG’s subsidiary in Spain, seeking compensation for the two trucks that it acquired at cartelized prices.

The Spanish Court of First Instance rejected Sumal’s action because Daimler AG’s subsidiary was not an addressee of the Commission’s decision. Sumal appealed before the Provincial Court of Barcelona, which in turn stayed the proceedings and requested guidance from the Court of Justice on whether and, if so, under what conditions a subsidiary can be held liable for the infringements of its parents.

EU law governs downward liability in follow-on damages actions

At the outset, the Court of Justice confirmed two fundamental findings from its recent Skanska ruling.[4] First, the determination of the entity required to provide compensation for damages caused by an antitrust infringement is directly governed by EU law. Second, given that follow-on actions for damages are an integral part of the enforcement of EU competition rules, the concept of “undertaking” has an identical scope in public and private enforcement. While Skanska made this clear with respect to parental (or upward) liability, Sumal confirms that the principle also applies with respect to downward liability.

Antitrust liability is imputed to the “undertaking”

The Court of Justice observed that EU competition laws target the activities of “undertakings.” This concept must therefore also determine the perpetrator of an antitrust infringement and the addressee of a fine. Independent from the concepts of “company” or “legal person,” the concept of “undertaking” covers “any entity engaged in an economic activity, irrespective of the legal status of that entity and the way in which it is financed” and defines an “economic unit.” Accordingly, an undertaking may consist of several natural or legal persons, but constitute one unitary organization.

The Court of Justice ruled that if at least one entity within an economic unit commits an infringement of EU competition rules, the whole economic unit, including each single entity within such economic unit, is to be treated as having committed the infringement. Accordingly, the decisive condition to bring a follow-on damages action against a subsidiary is the existence of one single economic unit that comprises both the subsidiary and its parent entity, and not whether the subsidiary was an addressee of the Commission’s decision.

Applying this principle to the context of downward liability, the Court of Justice held that two conditions need to be met for a victim to bring a claim against a subsidiary for its parent company’s infringement:

  • Economic, organizational, and legal In line with Akzo Nobel, the Court of Justice reiterated that the existence of decisive influence or control over the subsidiary by its parent company demonstrates such links. The Court, however, did not elaborate further on the conditions required to establish economic, organizational, and legal links between the subsidiary and the parent.
  • Specific link between the economic activity of the subsidiary and the subject matter of the anticompetitive The Court of Justice recognized that certain groups of companies or conglomerates consist of several entities that are active with different and unrelated economic activities. To exclude liability for subsidiaries that carry out economic activities entirely unconnected to those of the parent company, the Court required the claimant to show that the defendant subsidiary carried out an economic activity with a specific link to the subject matter of the infringement in question. For this purpose, the claimant should in principle establish that “the anticompetitive agreement concluded by the parent company […] concerns the same products as those marketed by the subsidiary.”[5] With this second condition, the Court of Justice effectively confirmed that a single corporate group may be composed of more than one economic unit, each a separate subject of EU antitrust laws.[6]

Subsidiary’s right of defense

The Court of Justice emphasized that a subsidiary’s right of defense must be observed in antitrust damages actions. In particular, the subsidiary should be able to dispute (i) that it belongs to the same undertaking as its parent company, and (ii) the existence of an infringement.

If, however, a preceding Commission decision has found an antitrust infringement by the parent company, the subsidiary cannot challenge the existence of an infringement in a follow-on damages action before the national court. In this scenario, the entire undertaking, both the subsidiary and the parent company, is deemed to have had the opportunity to challenge the finding of an infringement during the administrative procedure.

Practical implications

The judgment has several practical implications:

The range of options for antitrust victims expands. Victims of an antitrust infringement can bring damages actions in their home jurisdiction against a local subsidiary of the perpetrator instead of a parent company located in another jurisdiction. By doing so, victims can avoid the costs and practical difficulties of bringing a damages action against a foreign parent company, which may lead to more complex service requirement and enforcement procedures. More generally, the judgment potentially increases the range of jurisdictions in which actions may be brought.

  • Sister companies may face follow-on damages actions. The judgment does not appear to limit its interpretation of the notion of undertaking to the matter of downward liability. Applying the same interpretation to the context of horizontal liability, sister companies may also be held liable for their respective infringement, if they form part of the same economic

Any legal entity within an economic unit may be liable to pay an antitrust fine. While the judgment concerned subsidiaries’ liability for antitrust infringements of their parents in the context of private enforcement, the Court of Justice clarified that the Commission may choose to fine any legal entity belonging to the same economic unit when at least one legal entity within that economic unit commits an antitrust infringement. The fact that a legal entity is not named as an addressee of such Commission decision cannot be relied on to argue that it was not part of the same economic

[1] Sumal, S.L. v Mercedes Benz Trucks España, S.L. (“Sumal”) (Case C-882/19) EU:C:2021:800.

[2] See, e.g., ICI Chemical Industries v Commission (Case 48/69) EU:C:1972:70; AEG v Commission (Case 107/82) EU:C:1983:293; Akzo Nobel NV and others v Commission (“Akzo Nobel”) (Case C-97/08 P) EU:C:2009:536.

[3] Trucks (Case AT.39824), Commission decision of July 19, 2016.

[4] Skanska Industrial Solutions and Others (“Skanska”) (Case C724/17), EU:C:2019:204.

[5] While this second condition appears to narrow down the classical concept of “undertaking.” the judgment does not provide much guidance on where the line needs to be drawn in determining the specific link between the subsidiary’s economic activities and the subject matter of the anticompetitive conduct. Questions may arise, for example, where the parent and the subsidiary sell similar but differentiated products (e.g., different brands of trucks or different types of confectionery), or even vertically-related products (e.g., truck parts).

[6] While this approach helps limit the attribution of downward liability to subsidiaries that carry out related economic activities, the same interpretation may have further implications in areas where the notion of “undertaking” is used. For example, it might suggest that an intra-conglomerate agreement between two subsidiaries of a corporate group is subject to Article 101 TFEU if the subsidiaries are engaged in different and unrelated economic activities.