Liability private equity firm for anticompetitive conduct

In a ruling of 30 January 2017, the Rotterdam District Court confirms the liability of a private equity firm for anticompetitive conduct by one of its portfolio companies.


On 30 January 2017, the administrative division of the Rotterdam district court upheld a decision by the Authority for Consumers and Markets (ACM) to impose fines on private equity firm Bencis for anticompetitive conduct by its portfolio company Meneba. According to the ruling, investment firms can be held liable for conduct of their portfolio companies in which they have a controlling interest, even if they had no knowledge about the anticompetitive behavior.

ACM fines flour producers

In 2010, the ACM imposed fines totaling EUR 81.6 million on Meneba and other flour producing companies further to a cartel investigation. This investigation was in cooperation with competition authorities in Belgium and Germany. In appeal proceedings brought by Meneba and others these fines were upheld. Further to objections filed by two flour producers, the ACM initiated a new investigation into the private equity companies that acted as controlling shareholders of Meneba and also imposed fines on these investment firms, including private equity firm Bencis. Bencis appealed these fines, inter alia, on the basis that it had no knowledge about the alleged infringements of competition rules.

Parental liability doctrine

In this case, the ACM argued that the conduct of Meneba could be attributed to the private equity parent company on the basis of the parental liability doctrine. This was in line with the position taken by the European Commission in 2014 when Goldman Sachs was fined EUR 37.3 million for the alleged anticompetitive conduct of one of its portfolio companies on the market for high voltage cables.

Decisive influence suffices

The Rotterdam district court has now confirmed that the relevant question under the parental liability doctrine is whether an investment firm is in the position to exercise decisive influence over its shareholdings on the basis of economic, legal or organizational links. Applying this test, the appeal of Bencis was rejected.


From this ruling it follows that private equity and other investment companies have the same responsibility as corporations for subsidiaries over which they exercise decisive control. Such professional investors should, thus, should be carefully considering whether the companies they invest in are and remain in compliance with the competition rules.