applicability of competition law principles on public sector ...

subsidiary is controlled by the parent. 77 However, the European commission in certain cases has
also held a minority holding as sufficient affiliation for the two entities to be treated as single
economic entity if the minority shareholding allows the parent to decisively influence and
determine the strategic behavior <strong>of</strong> the affiliate. 78
Relationships not qualifying as Single Economic Entity
Despite the existence <strong>of</strong> certain links between undertakings they could not be regarded as single
economic entity. In IJsselcentrale 79 the commission determined that the fact that electricity
producers cooperate so closely that they can be said to form ‘one indivisible system <strong>of</strong> economic
supply’ in providing electricity to the public does not mean that they form a single economic
entity when they are separate legal entities pursuing independent pricing policy. Thus, the
relationship between the two entities must be <strong>of</strong> significant control in order to establish them as
single economic entity.
When a subsidiary is no longer under the control <strong>of</strong> its parents for instance because it is sold an
agreement between the two companies can become subject to Article 81(1) scrutiny as the parent
subsidiary relation has ended. 80 Although an agreement between connected firms may not
infringe Article 101, the manipulation <strong>of</strong> a subsidiary company by a parent company might lead
to <strong>competition</strong> Law violation. For instance, a parent company through an agreement ordering its
subsidiary to impose export ban on its distributers, such a restriction has itself been held to be an
Article 81 violation. 81
3.3 Antitrust Liability in the US:
The Section 1 <strong>of</strong> the Sherman Act provides that every contract, combination in the form <strong>of</strong> trust
or otherwise, or conspiracy, in restraint <strong>of</strong> trade or commerce among the several States, or with
foreign nations, is declared to be illegal. 82 Section 1 infringements require at least bilateral
action since a company cannot conspire by itself. 83 Section 2 84 on the other hand prohibits
77 ICI and CSC v. Commission, [1974] ECR 223 (para 37).
78 Eridania/ISI, M 62, 1991.
79 Ijsselcentrale, OJ 1991 L28/32.
80 Austin Rover Group, OJ 1988 L45/34.
81 Re Kodak, JO [1970] L 147/24.
82 Section 1, Sherman Act, 1890.
83 Freeman v. San Diego Association <strong>of</strong> Realtors, 322 F.3d, 1147
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