Can an economic successor be liable for the anticompetitive behavior of the previous owner of the company?

The answer is yes, but with some limits.

It is necessary to distinguish between two principles:

-          Personal Liability principle

-          Economic continuity criterion

Under the first one, the legal person, who ran the business at the time the infringement was committed, will answer for the illicit behavior. It does not matter which legal entity runs the business when the decision of infringement would be adopted by Antitrust Authorities.

Under the second one, the legal person, who runs the business at the time the decision of infringement was adopted, will answer for the illicit behavior. Nevertheless the European GC has established a limit to the application of this principle in its recent ruling of 17 May 2013, in case Parker ITR Srl and Parker-Hannifin Corporation v. European Commission (case T-146/09).

The economic successor will be liable only in two cases:

-          When the seller that committed the infringement has ceased to exist.

-          When the seller exists and:

• The seller and the legal entity that currently runs the company are economically or organizationally linked (ej: a merger)
• The transfer of the company has been done under no normal market conditions in order to avoid antitrust law.

Conclusion: If a company is sold to a third party on market conditions, the seller entity will assume liability and not the buyer. The economic continuity criterion only applies if one of the above two exceptions applies.