Cementing the liability of infringers of competition law

The CJEU’s judgment in C-724/17 Vantaan kaupunki v Skanska Industrial Sols and Ors.

On 14th March 2019, the CJEU handed down an important judgment for victims of competition law infringements, ensuring that their ability to seek compensation for losses caused by those infringements cannot be thwarted by sales or dissolutions of the infringing entities or corporate restructurings.

In addition, the Court emphasised the importance of private damages claims in the enforcement of the competition rules more generally; noting that the role of such claims goes beyond ensuring compensation for losses and extends to the punishment and deterrence of anti-competitive conduct.  


The issue arose in the context of a Finnish damages claim relating to the asphalt cartel, where the legal entities which had participated in the cartel had been dissolved in voluntary liquidation procedures and the damages claim had been filed against the successor companies. Finnish law limits the attribution of liability for damages only to the legal entity which caused the loss. As a result, where the infringing entity has been dissolved, obtaining compensation for losses suffered as a result of a competition law infringement is practically impossible. The Finnish Supreme Court sought a ruling from the CJEU on whether the determination of who is liable for compensation is a matter of EU or national law.

The CJEU's judgment

Recognising that it is for a member state to lay down the detailed rules which govern how the right to claim compensation can be exercised, the CJEU nevertheless held that the question of who is required to provide compensation is a matter directly governed by EU law. If an individual’s right to claim damages is put at risk by the existence of a legal regime which allows an entity to avoid answering for the damage caused by its infringement, then EU law is not fully effective.

The Court was clear that, just as the public enforcement regime would be undermined if undertakings could avoid penalties through corporate restructuring; private enforcement would also be undermined if an undertaking could avoid claims for compensation by the same conduct. In the context of public enforcement, the Court applies the “economic continuity test” to determine who is liable for a penalty for a breach of the competition rules. Under the economic continuity test, liability for the infringement rests with the “undertaking”; and the EU law concept of “undertaking” includes the entire economic unit. This means that liability for the penalty passes to a successor where, from an economic point of view, the two entities are identical; or where an entity ceases to exist following the acquisition of its assets and liabilities by a different entity. The Court held that the same principle should apply in relation to the liability to pay compensation in a private damages claim. The Court supported this application by noting that private damages claims have an equivalent role in the punishment and deterrence of competition law infringements as penalties. Indeed, AG Wahl suggested that the compensatory function of a damages claim is subordinate to its deterrence function.


The Court has drawn a sensible parallel between public and private enforcement ensuring the effectiveness of the right to claim damages in all member-states by preventing the evasion of compensation claims through strategic restructurings. For those jurisdictions, like Germany, where the courts did not previously apply the concept of the “economic unit” in the attribution of liability in damages claims, the judgment leads to even more significant changes. It is now clear that all companies belonging to an economic unit, including the parent company of an infringing entity, can be held liable for the damages caused by a cartel.