Both judgments were delivered in separate cases following references for preliminary rulings by different national courts. The cases concerned actions for damages related to the European Commission's infringement decision concerning a cartel on the sale prices of trucks.
The CJEU has previously confirmed that the concept of ‘undertaking’ covers any entity engaged in economic activity, irrespective of its legal status and financing, thus defining an economic unit even if it consists of several natural or legal persons. In Case C‑882/19 (Sumal v Mercedes Benz Trucks España), the CJEU noted that in an action for damages based on an infringement of Article 101 TFEU found by the Commission in a decision, a legal entity not designated in that decision as having committed the infringement may still be held liable due to conduct amounting to an infringement committed by another legal entity within the same economic unit.
In the judgments summarised below, the CJEU confirmed that the concept of an ‘economic unit’ cannot be used to serve a summons on a subsidiary if it is intended for its parent company. A ‘reverse application’ of this concept is precluded for determining where damage occurred under article 7(2) of the Brussels I bis Regulation.
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Case C-632/22: service of a claim for antitrust damages at the domicile of a subsidiary
The CJEU's judgment of 11 July 2024 in Case C-632/22 (Volvo v Transsaqui) concerns the service of legal documents under Regulation (EC) No 1393/2007. Transsaqui brought an action for damages before a Spanish court, stating that Volvo's registered office was in Gothenburg (Sweden), but that the summons to appear should be served at the registered office of the subsidiary in Spain. The subsidiary refused to accept the summons, arguing that it should be served at Volvo’s headquarters in Sweden.
The Spanish court referred questions to the CJEU, including whether service on a parent company against which damages are sought can be considered to have been properly effected when such service was effected (or attempted) at its subsidiary’s place of business in the state in which the legal proceedings were brought, while the parent company has not appeared in proceedings and remains in default.
The CJEU held that the concept of ‘undertaking’ does not have its own legal personality. The victim of the anti-competitive practice in question cannot bring an action for damages against the undertaking as such, but must necessarily bring an action against one of the legal entities of which it is composed. The CJEU also pointed out that while the alleged victims of an infringement of EU law may rely on the right to a fair trial, this right also protects the defendant, even where the latter has previously been found to have infringed Article 101(1) TFEU. Unlike Article 101(1) TFEU, which applies to undertakings, the right to a fair trial guaranteed by Article 47 of the Charter protects each legal person individually. Therefore, competition disputes are not exempt from the procedural guarantees of that article, which require that judicial documents intended for a person are actually and effectively served that person.
The CJEU concluded that Article 47 of the Charter and Article 101 TFEU, read together with Regulation No 1393/2007, must be interpreted as meaning that a parent company against which proceedings have been brought for compensation for damage caused by an infringement of competition law is not validly served with a summons where service of the document instituting the proceedings was effected at the address of its subsidiary domiciled in the member state in which the proceedings were brought, even if the parent company forms an economic unit with that subsidiary.
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Case C-425/22: reverse application of the ’economic unit‘ concept
On 4 July 2024, the CJEU issued its judgment in Case C-425/22 (MOL v Mercedes-Benz) concerning Article 7(2) Brussels I bis Regulation, which provides that a party domiciled in a member state may be sued in another member state in matters relating to tort, delict or quasi delict, in the courts for the place where the harmful event occurred or may occur. The Hungarian company MOL brought claims for damages before the Hungarian court. Subsidiaries of MOL purchased or leased trucks during the infringement period. MOL claimed to have suffered harm equivalent to the overpayment that its subsidiaries made on account of the anticompetitive conduct penalised by the Commission.
MOL argued that its registered office, as the centre of the economic and financial interests of the group that it forms with its subsidiaries, is the place where the ‘harmful event’ within the meaning of Article 7(2) Brussels I bis occurred. In essence, MOL argued that since infringement of competition law triggers joint and several liability of the entire economic unit, a mirror image (or the reverse) of the same principle must apply in the case of a claim for compensation for the damage caused by an infringement of competition law affecting a member of the economic unit.
Following the Hungarian Supreme Court's reference for a preliminary ruling, the CJEU held that the objectives of proximity and predictability of the rules governing jurisdiction, consistency between the forum and the applicable law, and the unhindered possibility of claiming damages for harm caused by an infringement of competition law affecting a member of the economic unit preclude the reverse application of the concept of ‘economic unit’ for the determination of the place where the harm occurred under Article 7(2) of the Brussels I bis Regulation.
The CJEU concluded that this provision must be interpreted as meaning that the concept of the ‘place where the harmful event occurred’ does not cover the seat of a parent company which brings an action for damages for harm suffered solely by its subsidiaries on account of anticompetitive conduct of a third party, which constitutes a breach of Article 101 TFEU, even if it is claimed that that parent company and those subsidiaries form part of the same economic unit.
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