Parent Trap

On February 13, 2025, the Court of Justice of the European Union (CJEU) issued a judgment in case C‑393/23 Athenian Brewery and Heineken v Macedonian Thrace Brewery on the question whether a judge in a EU member state where the parent company is domiciled can rely on the presumption of decisive influence of the parent company over the economic activity of the subsidiary, that infringed competition law, to assess the close-connection requirement under Article 8(1) of the Brussels I bis Regulation. The CJEU confirmed that a court may solely rely on the presumption of decisive influence to establish its international jurisdiction, but on the condition that the defendants are not deprived of the opportunity to present evidence demonstrating that the parent company did not hold all or nearly all of the subsidiary's capital, or that the presumption should otherwise be rebutted.

1. Facts and background

In September 2014, the Hellenic Competition Commission found that Athenian Brewery (AB) had abused its dominant position on the Greek beer market from 1998 to 2014 constituting a single and continuous infringement of Article 102 TFEU and Article 2 Greek competition law. AB is a Greek indirect subsidiary of Heineken N.V., which (indirectly) owns almost all (98.8%) of AB.

Macedonian Thrace Brewery (MTB), a competitor of AB, on the Greek beer market claims damages caused by AB's abuse of dominance. MTB seeks to hold both AB and Heineken jointly and severally liable before the Amsterdam District Court for these damages. Heineken and AB have disputed the jurisdiction of the Amsterdam District Court to hear MTB's claim against AB.

This case concerns the private enforcement of EU competition law and examines whether the rebuttable presumption of decisive influence, established in the public enforcement of competition law, affects jurisdiction under Article 8(1) of the Brussels I bis Regulation. The presumption entails that a parent company is presumed to exercise decisive influence over its subsidiary if it holds most or all of the subsidiary's capital. The following questions were referred to the CJEU:

1. Can a court in the parent company's domicile rely on this presumption when assessing its jurisdiction regarding a subsidiary domiciled in another member state?
2. If yes, what criteria should be applied if the defendant challenges the existence of decisive influence by the parent company?

2. CJEU ruling

The CJEU answered the first question affirmatively. It ruled that a court in the parent company's domicile, when hearing claims for joint and several liability of the parent company and its subsidiary for damages resulting from a competition law infringement by the subsidiary, may rely solely on the presumption of decisive influence to establish its international jurisdiction. Regarding the second question, the CJEU held that defendants, however, may not be deprived of the opportunity to present convincing evidence suggesting either that the parent company did not hold, directly or indirectly, all or nearly all of the subsidiary’s capital or that the presumption should be rebutted for other reasons.

The CJEU considered that, in order for Article 8(1) of the Brussels I bis Regulation to apply, it is necessary to ascertain whether, between various claims brought by the same applicant against various defendants, there is a connection of such a kind that it is expedient to determine those actions together in order to avoid the risk of irreconcilable judgments resulting from separate proceedings. From settled case-law of the CJEU it follows that for judgments to be regarded as irreconcilable, it is not sufficient that there is a divergence in the outcome of the dispute, but that divergence must also arise in the context of the same situation of fact and law. It is up to the court seized to assess, using all the relevant facts of the case before it, whether the same situation of law and fact exists with the claims against the different defendants.

In earlier case-law, the CJEU considered that the requirement of the same situation of fact and law is satisfied where claims are brought against addressees of a Commission decision finding a breach of EU competition law for damages caused by this infringement. The same situation of fact and law exists, even if the defendants in question participated in the implementation of the cartel in different places and at different times.

The key issue in the Athenian Brewery case was however, whether the requirement concerning the existence of the same situation of fact and law is met in the case of a claim for joint and several liability of the parent company and its subsidiary for damages caused by the subsidiary's infringement.

The CJEU confirmed that EU competition law applies to the activities of undertakings. The term "undertaking” must be understood as designating an economic unit even if, in law, that economic unit consists of several natural or legal persons. If an entity belonging to the economic unit (and thus, the undertaking) has infringed EU competition law, the entities the economic unit was made up at the time the infringement was committed are jointly and severally liable.

The CJEU held that Article 8(1) of the Brussels I bis Regulation applies to claims brought against both a parent company and its subsidiary, where the two form an economic unit, and the claims are based on the subsidiary's involvement in an infringement of EU competition law. This interpretation aligns with the objectives of ensuring the foreseeability of jurisdictional rules and upholding the principle of legal certainty.

In the present case, it has not yet been established whether Heineken and its subsidiary AB form an economic unit. The CJEU held, however, that where a parent company holds, directly or indirectly, all or nearly all of the capital of a subsidiary, there is a rebuttable presumption that the parent company exercises decisive influence over its subsidiary and that they constitute one undertaking. While this presumption was developed in the context of public enforcement, the CJEU affirmed that it also applies in private enforcement actions for damages from infringements of EU competition law.

The CJEU further clarified that, when determining its international jurisdiction, the court does not need to assess the admissibility or substance of the claim. Instead, it must identify the connecting factors with the member state in which it is situated as a basis for jurisdiction under Article 8(1) of the Brussels I bis Regulation. National courts are expected to verify jurisdiction based on available information, including evidence from the defendant, without addressing the substance of the case. In this context, information to establish that the claim does have the same factual and legal situation will be relevant. Consequently, in a situation such as the present case, the court seized may limit itself to the following: verifying that a decisive influence by the parent company over its subsidiary cannot be excluded a priori in order for the court to declare its competence, in so far as permitted under national law. That will be the case if the applicant relies on the presumption of the parent company’s decisive influence and liability.

3. Conclusion and takeaways

With this judgment, the CJEU has added another piece to the private enforcement puzzle. It clarified how the requirements set out in Article 8 Brussels I bis regulation should be interpreted in cases where a parent and its subsidiary are held joint and severally liable for a competition law infringement by the subsidiary.

This judgment confirms that an injured party may choose to bring claims either before the court where the subsidiary that infringed competition law is domiciled, or where the parent company is domiciled, even if it has not yet been established that the parent company is part of the same economic unit as the infringing subsidiary. To establish jurisdiction based on Article 8 Brussels I bis Regulation, the injured party only needs to assert that the parent company holds all or nearly all of the subsidiary’s capital and can thus be presumed to be part of the same undertaking. The threshold for the defendant to challenge this is high, requiring evidence that the parent company does not hold the majority or all of the subsidiary's capital, or that the presumption of decisive influence should be rebutted for other reasons in the specific case. In public enforcement, the rebuttable presumption is often considered to be practically irrebuttable.

Further developments on jurisdiction in competition litigation are anticipated in 2025. The Amsterdam Court of Appeal has also referred preliminary questions to the CJEU regarding jurisdiction and the interpretation of Article 8 Brussel I Regulation in the Power Cables case (C-672/23) and Italian cardboard case (C-673/23). More specifically, the Amsterdam Court of Appeal seeks guidance as to whether there is a close connection within the meaning of Article 8(1) of the Brussels I bis Regulation between a claim against a defendant that is not an addressee of an infringement decision and was not active on the market where the infringement took place, and the co-defendant who is an addressee of that decision.

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