EU competition watchdog under fire

The EU’s competition watchdog, headed by MarioMonti, has seen a veto on corporate mergersoverturned for the third time in five months. TheCourt of First Instance, the lower chamber of theEuropean Court of Justice, has overturned theCompetition Commission’s decisions, coupled withscathing criticisms. On 25 October, the Courtannulled the decision to block the EUR 1.7bn mergerbetween Tetra Laval, the Swedish packaginggroup, and Sidel, a French plastic bottle maker.Three days previously, the Court had overturnedthe curb on the Schneider and Legrand merger,and earlier this year referred to the Commission’sblocking of the Airtours, now My Travel,acquisition of First Choice as ‘without proving thatit would actually have an adverse impact oncompetition’. Until this year the Court had neverreversed a veto.

The fallout is likely to result in a shift in thebalance of EU competition clearance in favour ofbusiness. Denis Waelbroeck, of Ashurst MorrisCrisp, who represented Tetra, says ‘The idea ofself-control within the Commission is very weak.The problem is really that the Commission isprosecutor and judge in every case’. Derek Morrisof the UK’s Competition Commission has raisedthe question of whether or not the Europeanwatchdog should recruit a chief economist.

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