Wednesday, July 8, 2009
Piercing the Corporate Veil': Imposition of Fines on Associations of Undertakings for Violation of EC Competition Law
Posted by D. Daniel Sokol
Alexandr Svetlicinii, European University Institute - Department of Law describes Piercing the Corporate Veil': Imposition of Fines on Associations of Undertakings for Violation of EC Competition Law.
ABSTRACT: The ECJ's judgment in Coop de France represents an important clarification and affirmation of the basic principles and objectives of the EC fining policy for violations of the competition law. In the present case the Community courts encountered the situation where the appellants were in effect attempting to escape the prosecution for the established violation of competition law by concluding and implementing an anticompetitive agreement for the benefit of its members. The judgment demonstrated that the issue of "objective interests" can make a difference in calculating the fines. Here the Court exemplified the importance of this concept when addressing the principle of non bis in idem and existence of the common members that took part in various associations at the same time. The ruling provided that in situation where the interests of an association are identical to those of its members? the fining based on the latter's turnover is justified. The ECJ's ruling once again indicated the adherence to the main objective of the fining policy articulated in the preceding case law and 2006 fining guidelines: "Fines should have a sufficiently deterrent effect, not only in order to sanction the undertakings concerned (specific deterrence) but also in order to deter other undertakings from engaging in, or continuing, behaviour that is contrary to Articles 81 and 82 of the EC Treaty (general deterrence)". It could be expected that the clarification of the legal standards made by the Community courts will contribute to the prevention of the infringements where associations are used as a convenient legal vehicles for fostering anticompetitive objectives, beneficial to their members.