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Cartel damages: who is the liable “company”?

Blog 24/07/2019

 dr Christian Andrelang, LL.M.
   Specialist lawyer for international business law
   Specialist lawyer for commercial and corporate law

Cartel damages: In its “Skanska” decision (ruling of March 14, 2019, C-724/17), the ECJ had to deal with the question of who is liable for damages under cartel law. The decision is likely to have far-reaching effects on the possibility of enforcing cartel damages.

Cartel damages – what is it about?

One of the most important questions in tort law is the question of the right opponent. This also applies to cartel damages. If you sue the wrong opponent, the lawsuit is lost for this reason. This costs money and time, which can be unfortunate for the statute of limitations for claims for damages. In addition, the question arises as to the economic viability of a lawsuit. If you sue the right opponent, but he has no liquid funds, a lawsuit won will not turn into money.

In the "Skanska" case, the cartel-damaged city of Vantaa sued the company Skanska, which had taken over the assets of companies involved in the cartel, for damages. The city of Vantaa had purchased asphalt from the companies involved in the cartel at inflated prices. However, all companies had already been liquidated, so that there was nothing left for the city of Vantaa. The acquiring Skanska was not involved in these cartels. So, is Skanska liable for damages simply because it took over the assets of the now-liquidated cartel-participating companies?

Cartel Damages – What's new?

In its judgment, the ECJ clearly answered this question in the affirmative. Under national law they may be different companies. In the case of antitrust damages, however, the term "company" is to be understood in the sense of European antitrust law, which the national courts have to observe. According to this, the “company” is also the group parent company of the company involved in the cartel if it forms an economic unit with it, i.e. can exercise a dominant influence over it (see ECJ, judgment of 10.9.2009, C-97/08 – Akzo Nobel). This was already the case law of the ECJ for liability for fines. The special innovation is that this broad corporate understanding also applies to antitrust claims for damages.

At the same time, the ECJ confirms that civil liability for damages also applies to the legal successor. In this respect, too, the ECJ transfers its case law on liability for fines (“principle of economic continuity”) to claims for damages under antitrust law.

In plain language this means: A parent company is itself liable for damages if a subsidiary, with which the parent company forms an economic unit, has committed an antitrust violation. An economic unit exists when the subsidiary cannot determine its own market behavior autonomously, but essentially has to follow the instructions of the parent company.

Cartel Damages – What does that mean?

If you want to examine and claim damages for your company because of a cartel and claims based on this, the ECJ has opened the door a little further for you. You are not limited to your contractual partner who was involved in antitrust violations against you. You can also approach the parent company, such as a holding company, for your claims for damages, which in case of doubt has significantly better liquid funds to meet your claims for damages. You can also take action against the legal successor in the event of restructuring of the liable company.

On the other hand, the new ECJ case law also plays an important role for company takeovers. If a company is to be taken over, the due diligence, i.e. the company audit, must take more account of whether the target company has violated the ban on cartels and is therefore threatened with fines and claims for damages. According to the case law of the ECJ, the purchasing company would be liable for this.

Cartel damages – what is important for you now?

If you want to claim cartel damages, involve the entire group structure of the cartel. Any company that forms a unit with the company violating anti-trust law because it can exercise a dominant influence can be considered as an opposing party and as a defendant. In the case of company takeovers, even more attention must be paid to liability for antitrust violations. As a specialist lawyer for international commercial law, I would be happy to support you and your company.

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Anwalt Gesellschaftsrecht und Handelsrecht

dr Andrelang, LL. M

Specialist lawyer for international business law

Specialist lawyer for commercial and corporate law


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