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

01.11.2018 NL law
A problem shared is a problem halved: fine reduction and fine liability are correlated

Short Reads - Companies should beware that when held jointly responsible for a cartel infringement, a fine reduction granted to one of them could affect the joint and several liability of fines allocated to the remaining companies. According to the General Court, in applying the principle of equal treatment, the remaining liability for fine payment should be distributed proportionately by the Commission.

Read more

01.11.2018 NL law
European Court of Justice clarifies the application of choice of forum clauses in competition damages claims

Short Reads - On 24 October 2018, the European Court of Justice ruled that a choice of forum clause in a contract between Apple and eBizcuss, a former reseller of Apple products, may apply to abuse of dominance claims, even when the clause does not explicitly refer to disputes relating to liability resulting from a competition law infringement.

Read more

10.10.2018 NL law
Ongevraagd advies Raad van State: normering van geautomatiseerde overheidsbesluitvorming

Short Reads - Op 31 augustus 2018 heeft de Afdeling advisering van de Raad van State (hierna: "Afdeling advisering") een 'Ongevraagd advies over de effecten van de digitalisering voor de rechtsstatelijke verhoudingen' betreffende de positie en de bescherming van de burger tegen een "iOverheid" uitgebracht. Het gebeurt niet vaak dat de Afdeling advisering zo een ongevraagd advies uitbrengt. Dit onderstreept het belang van de voortdurend in ontwikkeling zijnde technologie en digitalisering in relatie tot de verhouding tussen de overheid en de maatschappij.

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