Parent Companies May Pay For Subsidiary's Time-Barred Wrongs

It should be no surprise to companies that they may be held liable for their subsidiaries' cartel wrongdoings. However, what is probably not on every company's radar is that the parent company is deemed personally liable, even if its liability merely derives from its subsidiary's liability, As a result, a parent company may remain liable for its subsidiary's unlawful cartel conduct, even if the limitation period has expired for the subsidiary, because the parent company is considered to have committed the cartel infringement itself. Companies should therefore keep in mind that their liability for a subsidiary's unlawful cartel conduct may have an even bigger impact than expected. All the more reason to have an effective compliance programme in place at all levels of the company organisation to mitigate the risk of liability for subsidiaries' anti-competitive conduct.