Short Reads

General Court annuls European Commission's merger blocking decision in UPS/TNT for procedural errors

General Court annuls European Commission's merger blocking decision in UPS/TNT for procedural errors

General Court annuls European Commission's merger blocking decision in UPS/TNT for procedural errors

04.04.2017 NL law

On 7 March 2017, the General Court ("GC") annulled the decision of the European Commission to block the proposed acquisition of TNT Express ("TNT") by United Parcel Service ("UPS"). The GC found that the Commission had infringed the right of defence of UPS by failing to communicate the final version of the econometric model used in the assessment.

UPS notified the Commission of its proposed acquisition of TNT in 2012. On 30 January 2013, the Commission decided the proposed acquisition was incompatible with the internal market and with the EEA agreement. The Commission decided not to grant approval for the proposed acquisition as it would lead to competitive concerns on the market for express small package delivery services in 15 Member States.

The Commission first estimated the degree of concentration on the market by using an econometric model based on variables recommended by UPS. However, in the later "prediction stage", the Commission used different variables.

UPS appealed the decision at the GC arguing that the Commission had infringed its right of defence. UPS argued that it could not effectively challenge the reliability of the econometric model used by the Commission in its decision, properly analyse the differences between the Commission’s results and its own results, or replicate the Commission's results.

The GC sided with UPS and emphasized that observing the right of the defence is a general principle of EU law which much be guaranteed in all proceedings. The GC noted that the right to a fair hearing "requires that the undertaking concerned must have been afforded the opportunity, during the administrative procedure, to make known its views on the truth and relevance of […] the documents used by the Commission to support its claim."

The GC ruled that the changes made to the final model could not be regarded as negligible. By failing to communicate the final model the Commission had infringed the right of defence of UPS. The GC concluded that UPS might have been better able to defend itself had the final version of the econometric model been at its disposal. Consequently, the GC annulled the decision.

The judgment confirms that parties should be given sufficient opportunity to comment and respond to analyses used by the Commission in merger cases. The parties are unable to refile the concentration as TNT has meanwhile been acquired by FedEx. However, the GC's ruling might form a basis for UPS to claim damages.

This article was published in the Competition Law Newsletter of April 2017. Other articles in this newsletter:

  1. Court of Justice confirms the fine imposed on Samsung in the cathode ray tubes cartel
  2. Court of Justice rules on the Hearing Officer's competence to resolve confidentiality requests
  3. European Commission proposes a new Directive to empower national competition authorities to be more effective enforcers of EU competition law rules
  4. European Commission launches anonymous whistleblower tool
  5. District Court of Gelderland denies passing-on defense in antitrust litigation related to the GIS-cartel

Team

Related news

13.09.2018 NL law
FlixBus-uitspraak over de strijd van nieuwe spelers op de openbaar vervoermarkt tegen het bestaande concessiemodel met exclusieve rechten.

Short Reads - Het verrichten van openbaar vervoer geschiedt op basis van een concessie. Een concessie is het recht om met uitsluiting van anderen openbaar vervoer te verrichten in een bepaald gebied gedurende een bepaald tijdvak, aldus artikel 1 van de Wet personenvervoer 2000 (hierna: de 'Wp 2000'). 

Read more

01.08.2018 BE law
Belgian Court of Cassation annuls decision prohibiting pharmacists from using Google Adwords

Short Reads - On 7 June 2018, the Belgian Court of Cassation, ruled that a decision of the Pharmacists Association Appeals Council (Appeals Council) prohibiting pharmacists from using Google Adwords to offer over-the-counter (OTC) products violated Belgian competition law because the Appeals Council did not sufficiently justify why such a prohibition was necessary for health reasons. The Appeals Council must now issue a new decision.

Read more

01.08.2018 NL law
Court of Appeal in the Netherlands decides to appoint independent economic experts in TenneT v ABB

Short Reads - On 20 July 2018, the Court of Appeal of Gelderland published another interim judgment in the ongoing proceedings between TenneT, the grid operator in the Netherlands, and ABB in relation to the gas insulated switchgear (GIS) infringement. After the Dutch Supreme Court had confirmed in a judgment of 8 July 2016 [see our August 2016 Newsletter] that the passing-on defence is available under Dutch law, the Court of Appeal of Gelderland decided to appoint independent economic experts to provide input on the calculation of overcharge and the existence of pass-on.

Read more

01.08.2018 NL law
European Court of Justice dismissed Orange Polska’s appeal in abuse of dominance case

Short Reads - On 25 July 2018, the European Court of Justice rejected Orange Polska's appeal relating to a European Commission decision finding an abuse of dominance on the Polish wholesale broadband market. The judgment clarifies that the Commission does not have to take into account the actual or likely effects of an infringement when determining the amount of the fine.

Read more

Our website uses cookies: third party analytics cookies to best adapt our website to your needs & cookies to enable social media functionalities. For more information on the use of cookies, please check our Privacy and Cookie Policy. Please note that you can change your cookie opt-ins at any time via your browser settings.

Privacy – en cookieverklaring