Grolsch Cartel Fine Annulment: Should Parent Companies Pay for the Anti-Competitive Conduct of a Subsidiary?

(by Andreas Stephan) The General Court has annulled a €36.6m fine imposed on Grolsch for the price fixing of beer in Holland. In its decision, the European Commission had treated Koninklijke Grolsch NV and its subsidiary as a single economic entity and calculated fines accordingly.  This is important.  The maximum fine is capped at 10% of turnover and the parent company combines the sales of many subsidiaries.  Taken at face value, the Court ruling could substantially reduce fines and so also their deterrence effect.