General Court rejects power cables appeals

In its April 2014 decision, the Commission imposed fines totalling over €301m on eleven European, Japanese and South Korean manufacturers of underground and submarine high voltage power cables.  The manufacturers challenged the Commission's decision on various grounds.  The General Court has now dismissed all 15 separate appeals.  In particular, the judgments confirm the Commission's position in relation to (i) parental liability and (ii) its powers to take data away from dawn raids.

Parental liability

It is well established under EU and UK competition law that a parent company can be held liable for the anti-competitive conduct of those subsidiaries over which it exercises decisive influence.  Parental liability can arise even the parent company was neither involved in nor aware of the anti-competitive conduct.

The judgment in the Goldman Sachs appeal (T-410/14) confirms that:

• the rebuttable presumption that a 100% shareholding confers decisive influence over the subsidiary can also apply to a lower shareholding (e.g. between 84% and 91%) where the shareholder, like a sole owner, exercises 100% of the voting rights associated with its subsidiary's shares (as was the case for Goldman Sachs prior to its subsidiary's IPO); and
• rights to decide the composition of the board, call general meetings, participate in strategic committees and receive regular updates on the business are not consistent with those of a pure financial investor and may demonstrate that a parent exercises decisive influence over its subsidiary, even with a shareholding as low as 31.6% (as was the case for Goldman Sachs post-IPO). 

Powers to remove data for later inspection

Regulation 1/2003 permits the Commission to examine an undertaking's books and records, irrespective of the medium on which they are stored, and to take or obtain copies or extracts of such books or records in any form.

The Nexans and Prysmian judgements (T-449/14 and 475/14) confirm that, in the context of a dawn raid:

• these powers permit the Commission to create copy-images of computer drives in their entirety in order to index and search the data; and 
• the Commission does not have to complete its review at the undertaking's premises: it can remove copy-images of drives for review at its offices, provided that it offers protections such as keeping the data in a sealed envelope, allowing the undertaking's representatives to attend the review, providing the undertaking with copies of documents to be placed on the case file, and deleting the copy-image at the end of the process.  

With thanks to Laura Carter of Ashurst for her contribution.