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The recent CJEU ruling in the Heineken v MTB case sheds further light on cross-border jurisdiction complexities and the application of the “single economic unit” doctrine in private enforcement of EU competition law. According to the CJEU, defendants can challenge presumptions on parental control meant to establish jurisdiction. The CJEU clarified the “anchor defendant rule” under Article 8(1) of the Brussels I bis Regulation, and ruled that the competition law concept of an “undertaking” based on the “single economic unit” doctrine and the related presumption that a parent company exercises decisive influence over its subsidiary can be taken into consideration when assessing jurisdiction. However, defendants can present evidence to refute the presumption of decisive influence.
In the world of cross-border legal disputes, Article 8(1) of the Brussels I bis Regulation allows for a foreign company to be sued alongside a local company in a local court, provided the claims are closely linked. The aim is to avoid inconsistent rulings.
In Heineken v MTB, two breweries, Athenian Brewery SA (AB) and Macedonian Thrace Brewery SA (MTB), operated in the Greek beer market. AB is a subsidiary of Heineken N.V., a Netherlands-based company, which indirectly held approximately 98.8% of AB’s shares. The Greek competition authority found that AB had abused its dominant position in the Greek beer market and that this constituted a single and continuous infringement of European and Greek competition law. Subsequently, MTB sued Heineken, as the anchor defendant, and AB before the Dutch courts to claim damages based on the Greek competition authority’s decision. The Dutch courts assumed jurisdiction over the claims against Heineken on the basis of the home court rule. For the claims against AB, the Dutch Supreme Court referred preliminary questions to the CJEU on the interpretation of Article 8(1) of the Brussels I bis Regulation.
For public enforcement cases, the CJEU confirmed that a subsidiary’s conduct may be imputed to its parent company when the subsidiary, despite having a separate legal personality, does not independently decide on its market conduct, but follows the parent company’s instructions in all material respects. In this context, the CJEU has also affirmed that a parent company, which directly or indirectly owns all or nearly all of the subsidiary’s capital, is presumed to exercise decisive influence over the subsidiary’s conduct. In such instances, the parent company and its subsidiary are deemed part of the same “undertaking” under EU law. The CJEU has also confirmed, in the context of public enforcement, that, where it is established that a parent company and its subsidiary constitute a single undertaking, both may be held jointly and severally liable for the infringement, unless the parent company can rebut the presumption of decisive influence by providing sufficient evidence to prove that the subsidiary acted independently in the market.
The question of whether the presumption of decisive influence, integral to the “single economic unit” doctrine, can also be contested in private enforcement in the context of establishing international jurisdiction has now been answered as well. The Advocate General supported international jurisdiction based (solely) on a presumption of decisive influence. However, in line with previous judgments on private enforcement (read more here), the CJEU adopted a more cautious approach, allowing to assume jurisdiction under Article 8(1) of the Brussels I bis Regulation on a similar basis, but requesting that defendants have the opportunity to contest this with substantial evidence.
The judgment has significant implications for both cross-border litigation generally and international competition litigation in particular. Considering the Advocate General's Opinion, the CJEU judgment is, overall, a positive development for defendants. However, the threshold for rebutting presumptions seems quite high. The extent to which the national courts will need to conduct this assessment and how the “decisive influence” requirement will be interpreted remain to be seen.
Practically, businesses may consider preparing for challenges by maintaining detailed governance records and adopting robust corporate governance policies to demonstrate the independence of subsidiaries. Developing comprehensive compliance programs and conducting regular audits can ensure that subsidiaries operate with autonomy.