The economic continuity principle
Produced in partnership with Dentons
The economic continuity principle

The following Competition practice note Produced in partnership with Dentons provides comprehensive and up to date legal information covering:

  • The economic continuity principle
  • Rationale behind the economic continuity principle
  • Liability of the successor when the initial operator has ceased to exist
  • The initial operator has ceased to exist in law
  • The initial operator has ceased to exist in fact
  • Liability of the successor when the initial operator continues to exist
  • Transfer of the infringing business to an independent third party
  • Intra-group transfer of the infringing business
  • Combination of operations: intra-group transfer of the infringing business in anticipation of its transfer to an independent third party
  • Private competition actions

The principle of economic continuity enables the European Commission to attribute liability for a violation of EU competition law to a legal entity who has not committed the infringement. This option, which is often presented as an exception to the principle of personal responsibility, is subject to narrow limits set by the EU Courts.

Rationale behind the economic continuity principle

Responsibility for committing a competition law infringement is in principle personal, owing to the nature and degree of severity of the ensuing penalties. Accordingly, the Commission shall normally impute liability on the legal person who ran the infringing business at the time the infringement was committed (the initial operator): this is the principle of personal responsibility.

However, in certain cases, the formalistic application of the principle of personal responsibility may affect the Commission’s ability to ensure effective enforcement of competition law, either because the initial operator no longer exists or because it underwent organisational changes.

Hence, the principle of economic continuity provides that when adopting a decision imposing fines, the Commission may, by way of exception, attribute liability to a legal person that did not run the business at the time the infringement was committed (the new operator). According to the EU Courts case-law, this exception only applies in the following circumstances:

  1. when the initial operator no longer exists (legally or economically) when the infringement decision is adopted

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