Parental Liability in the E.U.: Rebuttable Presumption of Decisive Influence and Four Misconceptions About Avoiding Liability

The joint and several liability risk E.U. parent companies face when a subsidiary violates E.U. competition law or the GDPR is crystallized when coupled with the rebuttable presumption applied by the European Commission and the E.U. courts that, absent limited circumstances, full ownership of a subsidiary is de facto proof that a parent company exercises “decisive influence” over its actions. This second article in our series analyzes this rebuttable presumption and explores the prohibitive difficulty parent companies face in refuting it, including common misconceptions shared by parents about ways to avoid liability. The first article described how the undertaking concept extends liability to parent entities, as well as the potential reputational risks, fines and civil damages those entities can face for violations. The third article will prescribe measures parent companies can take during and after the acquisition process to mitigate parental liability risk in the E.U. See “ECJ Confirms Direct Parental Liability for Civil Damages for Subsidiary Antitrust or GDPR Violations” (May 15, 2019).

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