Institutional Investors can Face Parental Liability in the EU, Just Like Other Corporate Parents

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On 12 July 2018, the EU’s General Court handed down 12 judgments relating to the power cables case. Among these was a judgment which confirmed that a parent company able to exercise all the voting rights in a subsidiary is presumed liable for any infringement of the EU competition rules by that subsidiary. The Court held that this also applies to institutional investors, such as private equity companies, in relation to their portfolio companies. Institutional investors should therefore conduct a careful due diligence focused on antitrust issues when acquiring a controlling stake in companies.