European Court of Justice affirms the need to show financial independence in order to overcome the rebuttable decisive influe…

On 8 May 2013, the European Court of Justice ("ECJ") rendered its judgement in the case Eni SpA v. Commission (C-508/11 P), upholding the General Court's judgement in its entirety. In particular, the ECJ upheld a finding of parental liability based on the rebuttable presumption of decisive influence exercised by an undertaking on its wholly owned subsidiary (the "presumption"). The ECJ upheld the finding of the General Court ("GC") that the presumption could be rebutted through evidence indicating financial independence of the subsidiary.

In its appeal, Eni SpA ("Eni") alleged that the GC had erred regarding the imputability of the subsidiary's infringement to the parent and the impossibility of rebutting that presumption, thereby rendering it strictly liable for the actions of the subsidiary. Eni alleged that a presumption was a violation of the rights of the accused, including Article 52 and 47 of the Charter of Fundamental Rights of the European Union (the "Charter") and Article 6 and 7 of the Convention for the Protection of Human Rights and Fundamental Freedoms (the "ECHR").

The ECJ upheld imputing conduct of a subsidiary to its parent for the purposes of Article 101, recalling that it is established case law that the rebuttable presumption by the undertaking on its wholly owned subsidiary can be overcome by the parent. The ECJ reaffirmed the compatibility of this presumption with the ECHR and the Charter precisely because of the "rebuttable" nature of the presumption. The ECJ dismissed Eni's arguments that the threshold to rebut the presumption was so unachievable that it rendered it strictly liable.

Furthermore, the ECJ upheld the GC's finding that "in the context of a group of companies, a company that coordinates, inter alia, financial investments within the group is in a position to regroup shareholdings in various companies and has the function of ensuring that they are run as one, including by means of such budgetary control." The ECJ thus concluded that to rebut the presumption not only operational but financial independence must be proven by the parent company.