The General Court recently annulled the European
Commission's decision to block UPS's intended acquisition
of TNT Express. According to the General Court, the Commission
infringed UPS's rights of defence by making substantial changes
to the econometric model used for its prohibition decision without
first communicating this updated model to UPS. The General Court
admitted that the need for speed in merger control proceedings
should be taken into account when assessing alleged infringements
of the rights of defence. However, in this case the General Court
ruled that the Commission had had sufficient time to, at the very
least, communicate the essential elements of the final model to UPS
before adopting its decision. A useful clarification companies
should be aware of when involved in merger proceedings.
In January 2013, the Commission blocked the proposed acquisition
of TNT Express by UPS. The Commission used the results of an
econometric model to find that the intended acquisition would have
restricted competition in the express delivery of small packages in
15 member states. UPS brought an action before the General Court seeking the annulment of the
Commission's decision. UPS argued, among other points, that its
rights of defence had been infringed because the econometric
analysis used by the Commission in its prohibition decision was
based on a different econometric model than what had been
deliberated during the administrative procedure.
The General Court reiterated that the right to a fair hearing,
which forms part of the rights of defence, requires that a company
should have the opportunity, during the administrative procedure,
to make known its views on the truth and relevance of the facts and
circumstances alleged and on the documents used by the Commission
to support its claim. In this particular case, the Commission had
adopted the final version of the econometric model more than two
months before the adoption of its prohibition decision. However,
the Commission had not communicated this updated model to UPS even
though the changes made to the model could not, in the General
Court's view, be regarded as negligible. By failing to inform
UPS of these changes, the Commission infringed UPS's rights of
defence. UPS might have been better able to defend itself if it had
been able to review the final version of the econometric model
chosen by the Commission before the adoption of the prohibition
decision. The General Court therefore annulled the Commission's
prohibition decision in its entirety.
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