An Economic Analysis of the Single Economic Entity Doctrine in EU Competition Law

13(2) Journal of Competition Law and Economics 281-327 (2017) https://doi.org/10.1093/joclec/nhx009

Posted: 24 Feb 2017 Last revised: 21 Aug 2023

See all articles by Carsten Koenig

Carsten Koenig

University of Cologne - Faculty of Law; Harvard University - Harvard Law School

Date Written: January 1, 2017

Abstract

According to well-established case-law of the European Court of Justice, in the European Union, parent companies can be fined for antitrust infringements by their subsidiaries. Furthermore, under a new EU Directive, signed into law on 26 November 2014, parent company liability is likely to be extended to private antitrust damages actions. In the United States, in contrast, courts are very reluctant to hold parent companies liable for antitrust infringements by their subsidiaries, whether criminally or in private suits. Against this background, I explore in this article whether parent company liability in the antitrust context is justified from an economic perspective. I build on works dealing with the economic analysis of antitrust enforcement, corporate torts, vicarious liability, criminal penalties, and limited as well as unlimited shareholder liability to assess the efficiency of parent company liability for antitrust infringements by subsidiaries. Based on an analysis of both the legal framework and the economic situation, I explain under what circumstances it is justified to hold parent companies liable and how parent company liability relates to other antitrust enforcement instruments. I conclude with implications for future antitrust enforcement policy.

https://doi.org/10.1093/joclec/nhx009

Keywords: EU competition law, US antitrust law, parent company liability, single economic entity doctrine, fines, damages, vicarious liability, individual liability, economic analysis

JEL Classification: K13, K14, K20, K21, K22, K42, L22, L23, L40

Suggested Citation

Koenig, Carsten, An Economic Analysis of the Single Economic Entity Doctrine in EU Competition Law (January 1, 2017). 13(2) Journal of Competition Law and Economics 281-327 (2017) https://doi.org/10.1093/joclec/nhx009, Available at SSRN: https://ssrn.com/abstract=2922136

Carsten Koenig (Contact Author)

University of Cologne - Faculty of Law ( email )

Albertus-Magnus-Platz
Cologne, 50931
Germany

HOME PAGE: http://koerber.jura.uni-koeln.de/pd-koenig

Harvard University - Harvard Law School ( email )

1563 Massachusetts Avenue
Cambridge, MA 02138
United States

HOME PAGE: http://pcg.law.harvard.edu/carsten-koenig/

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