Historical Court ruling could change merger rules

The European Court of First Instance on 6 June overturned a Commission decision to block a merger between UK tour operators Airtours and First Choice. The ruling could pave the way for more legal appeals by companies whose mergers might be blocked by the Commission’s Competition authority.

The Court of First Instance annuled the Commission’s decision because “the Commission has failed to prove that the merger would have adverse effects on competition”.

 

Competition Commissioner Mario Monti said: “My services and I will be studying carefully the ruling of the court which, of course, we fully respect, and its implications". The Commission might consider to appeal before the European Court of Justice.

Mr. Monti, on the other hand, maintained his line on the issue of dominant position. "I note that the Court has not questioned that the Merger Regulation can be applied to operations leading to collective dominance, which the Commission believes are damaging for consumers. This doctrine is entirely consistent with that of other jurisdictions in Europe and abroad, including the United States".

 

In September 1999, the Commission blocked the proposed acquisition of First Choice by Airtours. The Commission decided that the merger would have created a situation of oligopolistic dominance in the tour operators market. Airtours (now MyTravel) appealed before the Court of First Instance in Luxemburg.

 

Eleven other merger veto cases are awaiting a decision by the Court (among them MCI Worldcom/Sprint, GE/Honeywell, Schneider/Legrand and Tetra Laval/Sidel).

 

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