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ARTICLE · 26 SEPTEMBER 2023

Parental Liability – Holding Off The Decisive Influence Presumption

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It is well established that a parent company can be held liable for the conduct of its subsidiary where it exercises decisive influence over that subsidiary.

United KingdomAntitrust/Competition Law
Cameron Firth
Cameron Firth
Andrew Morrison
Andrew Morrison

It is well established that a parent company can be held liable for the conduct of its subsidiary where it exercises decisive influence over that subsidiary. Decisive influence is presumed where a parent owns 100% of the shares and/or voting rights in that subsidiary. This was further extended in the Goldman Sachs case to consider the broader context, for example, where an investor that previously exercised decisive influence retained significant rights to appoint or remove one or more directors, call shareholder meetings, etc.

More recently this issue has been cast back into the spotlight by the CMA's decision to fine Allergan plc (Allergan) for the conduct of its subsidiary Actavis UK in relation to the pricing of hydrocortisone tablets. The situation in this case is somewhat unique:

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