On 16 February 2017, the European Court of Justice (ECJ) handed down judgments on the appeals brought by Tudapetrol Mineralölerzeugnisse Nils Hansen (Tudapetrol), Hansen & Rosenthal KG and H&R Wax Company Vertrieb GmbH (H&R) and H&R ChemPharm in relation to the EEA wide paraffin wax cartel. The ECJ has dismissed the appeals in their entirety and upheld each of the companies' respective fines.
On 1 October 2008, the European Commission (Commission) found nine corporate groups (including Tudepetrol, H&R and H&R ChemPharm) guilty of participating in a price fixing and market sharing cartel in relation to paraffin wax between 1992 and 2005. The Commission imposed fines totalling €676 million.
As part of its investigation, the Commission found that the participating companies held regular meetings at hotels all over Europe to discuss prices, allocate markets and/or customers and to exchange commercially sensitive information.
A number of companies fined by the Commission lodged initial appeals with the European General Court. After Tudepetrol, H&R and H&R ChemPharm's appeals were dismissed, they appealed to the ECJ.
In dismissing the appeals, the ECJ's judgments rejected a wide variety of substantive and procedural claims brought by the appellants. The ECJ's reasoning for dismissing claims brought in relation to the liability of an undertaking for the actions of its employees are of particular note.
Tudapetrol challenged the General Court's finding that both Tudapetrol and H&R could be found to have committed parallel infringements on the basis that the individuals who attended the relevant anti-competitive meetings held positions in both companies. Tudapetrol claimed that the General Court had failed to show that the employee was specifically acting in the interests of Tudapetrol.
In rejecting this claim, the ECJ held that liability had been correctly attributed to both Tudapetrol and H&R for the anti-competitive conduct of its shared employee. The fact that the employee had roles in both companies during the period in question was irrelevant. Liability can still be attributed to both companies for the conduct of that employee.
The ECJ made it clear that it is possible for one single natural person to act simultaneously in the interests of different companies involved in an agreement.
In rejecting a similar argument brought by H&R ChemPharm, the ECJ also made it clear that for Article 101 to apply, conduct by a person who is authorised to act on behalf of the undertaking concerned is all that is needed; it is not necessary for any managers or partners of the undertakings concerned to have played a part, or to even have knowledge of the conduct.
The judgments highlight the importance for companies to ensure they have proper oversight of any individuals representing their interests.
It will be also be interesting to see whether customers of the Tudepetrol, H&R and H&R ChemPharm will seek follow on damages now that a final appeal decision has been made. Damages actions are already underway in the Netherlands against a number of the other paraffin wax cartelists.
With thanks to Antonia Bussey of Ashurst for her contribution
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