National law university odisha corporate law I national law university odisha
Whether the entities constitute a group within the meaning of Section 5; 2. Legal control
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- ANTITRUST In the case of Exclusive Motors Pvt. Ltd. v. Automobile Lamborghini
- Viho v. Commission
- Ahmed Saeed Flugereisen
| 1. Whether the entities constitute a group within the meaning of Section 5; 2. Legal control – for this, the regulator considers (a) The Parent / subsidiary relationships (b) The pattern of the shareholding i.e whether the shares are held directly or indirectly. (c) The negative and the positive voting rights held by the company. (d) Control in the appointment and removal of board members senior management employees. (e) Compliance of directives by subsidiaries. 35 Balwant Rai Saluja v Air India (2019) 2 SCC 1. 36 Arcelormittal India v Satish Kumar Gupta (2014) 9 SCC 407. NATIONAL LAW UNIVERSITY ODISHA CORPORATE LAW Ii b(f)b The Control of the parent over the affairs and the operations of the subsidiary company. (g) Whether the parent entity is in charge of preparing rules that govern the subsidiaries (h) Siblings - A sibling relationship exists when two distinct legal entities have a common owner etc. 3. Inseparability of the economic interest of the parties - The regulator considers the following factors in this regard (i) Whether the subsidiaries are economically dependent on the parent entity (ii) Identity of Interests i.e. whether the parent and subsidiaries' interests are common or different (iii) Absence of actual or potential competition or 'complementarity' among the products / services of the concerned entities, give the presumption of a single entity. 4. The influence of the parent in the pricing policy, the distribution activities and the production, cash flow, stocks, etc. NATIONAL LAW UNIVERSITY ODISHA CORPORATE LAW Ii bJUDICIAL APPOROACH TOWARDS SINGLE ECONOMIC ENTITY IN ANTITRUST In the case of Exclusive Motors Pvt. Ltd. v. Automobile Lamborghini 37 , the Competition CCI observed that for the application of sec. 3, an agreement must be shown between 2 or more enterprises. It held that the agreement between Ms. Lamborghini, the opposite party and its Group Company Volkswagen India could not be considered to bean agreement between the two enterprises as envisaged under section h) of the Act. According to the Commission, the agreements between entities constituting one enterprise, could not be assessed under the Act 38 The Commission relied on the internationally accepted doctrine of single economic entity. The Commission referred to the European case of Viho v. Commission 39 , 1995 ECR, where the Court went onto observe, firstly, the facts in the complaint by Viho, which complained that Parker was prohibiting the export of its product by its distributors, dividing the common market into national markets of the Member States, and maintaining artificially high prices for Parker products on those national markets. The Commission held that the complaint was not entertain able on the ground that Parker’s subsidiary companies were wholly dependent upon Parker Pen UK and enjoyed no real autonomy. It was also held by the Commission that an integrated distribution system was setup by Parker to sell its products in Germany. France, Belgium, Spain and the Netherlands through subsidiary companies and that these subsidiary companies and the parent company formed one economic unit within which the subsidiaries did not enjoy the real autonomy in determining their course of action in the market. The Commission also referred to the judgment of the Court of the First Instance and also relied upon the observation in the case of Ahmed Saeed Flugereisen 40 wherein it was held that Art 85 does not apply where the concerted practice in question is between undertakings belonging to a single group as parent company and subsidiary, if those undertakings form an 37 Download 0.88 Mb. Share with your friends:
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