European Commission Gets Split Decision In Beer And Acrylic Glass Antitrust Appeals
The European Commission has received a split decision in two appeals of multi-million euro fines it imposed for anticompetitive conduct in beer and acrylic glass markets.
The European General Court has annulled the European Commission’s 31.66 million euro antitrust fine assessed against beer brewer Koninklijke Grolsch NV. In case T-234/07, Koninklijke Grolsch v. Commission, the European General Court focused on the imputed liability to Koninklijke Grolsch for actions of its subsidiary, Grolsche Bierbrouwerij Nederland BV.
This appeal stems from a 2004 case in which the Commission found a cartel among the Netherlands’ four largest beer brewers. The Commission determined that Koninklijke Grolsch NV, Heineken NV (jointly and severally liable with its subsidiary Heineken Nederland BV), Bavaria NV and InBev NV divided the Dutch market and coordinated on prices, price increases, and various commercial conditions.
The conduct resulted in fines totaling 273.78 million euros (including 219.28 million to Heineken and 22.85 million euros to Bavaria). InBev was not fined as it was granted full leniency for participating in the investigation. The three penalized companies appealed.
In June 2011, the European General Court reduced the fines assessed to Heineken and Bavaria by a total of 23.42 million euros after finding there was a lack of evidence on the coordination of commercial terms.
On the remaining appeal, the European General Court ruled in favor of Koninklijke Grolsch stating that the Commission failed to demonstrate why Koninklijke Grolsch, which had not directly participated in the alleged cartel, should be liable. There is a rebuttable presumption in EU law that a parent company exercises decisive influence over the conduct of a wholly owned subsidiary. However, in the case at hand, the Commission did not discuss the economic, legal, and organizational links between Grolsche Bierbrouwerij Nederland and Koninklijke Grolsch. Thus there was insufficient evidence to attribute liability to Koninklijke Grolsch NV.
The European Commission fared better in T-216/06, Lucite International and Lucite International UK v. Commission. In this case, Lucite International, a division of Mitsubishi Rayon Co. appealed a 25 million-euro fine from the Commission for colluding on acrylic glass prices.
Lucite claimed its fine should be reduced due to attenuating circumstances. Lucite alleged its participation was limited to lower-level employees acquired after its 1999 purchase of Imperial Chemicals Industries plc (ICI). Further, a commercial policy put in place by Lucite after the acquisition of ICI worked to undermine the cartel. The European General Court disagreed, and ruled that Lucite failed to show “the Commission erred in its assessment of attenuating circumstances.”
Tagged in: International Competition Issues, Price Fixing,