EU: Why the Commission fined Goldman Sachs for undersea cable cartel

The European Commission announced last month millions in fines were issued to several manufacturers of undersea cables for their alleged participation in an anticompetitive cartel, but one of the fined companies, Goldman Sachs, had no involvement in the collusion.

Now reports say that the private equity firm was sanctioned because it manages GS Capital Partners, which held a stake in one of the fined companies, Prysmian. The fines demonstrate parent companies’ liability for cartel fines under EU competition rules if that company exercises its “decisive influence” over a company in which it holds a stake.

According to reports, the Commission did not find Goldman Sachs to have participated in the cartel, but it did find the company to have held decisive influence over Prysmian during the time of the alleged cartel. Goldman Sachs is reportedly considering an appeal of the Commission’s fine, and, should it occur, that challenge will likely center on the debate of what constitutes “decisive influence.”

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