Tetra-Pak case. The court stirs up trouble at the European Commission

(Archives) By annulling, for the second time this week, a European Commission decision on mergers, the court is forcing it to speed up the reform of its control over companies.

The decision of the European Court of First Instance to annul, on Friday (25 October), the veto put by the European Commission on the merger between the French plastic packaging manufacturer, Sidel, based in Le Havre, and the world leader in cardboard packaging, Tetra-Laval, has caused trouble in Brussels.

A serious disavowal for competition policy

In a few days, it is indeed the second decision annihilating a decision of the European authority of competition. If the ban on the takeover of Legrand by Schneider had been canceled last Tuesday, essentially for reasons of form and evidence, in the Tetra-Laval case, it is the entire economic argument of the Commission which is dismantled by the judges. The leader in packaging should also quickly file a new merger dossier in Brussels which has every chance, for lack of arguments against it, of being accepted.

A serious disavowal also for the European commissioner in charge of competition, the Italian Mario Monti. The latter, during an improvised press conference on Friday, moreover recognized without ambiguity this " major setback ". " It must be recognized that the court has pinpointed a weakness — he explains: the quality of our economic analysis is not strong enough ". But the commissioner immediately reaffirmed his will " not to sit idly by ».

A reform to come

The reform of the rules governing merger control should therefore be accelerated. A position of chief economist could also be created, directly attached to the director general of competition and a group of lawyers of the devil », responsible for issuing a critical opinion, would be solicited.

The dialogue with the companies, parties to the merger, should also be strengthened and greater flexibility in terms of deadlines introduced. Finally the role of third parties – competitors but also trade unions – will be increased. " I have great faith in this system concluded, a bit lyrically, Mario Monti, “ which allows a confrontation of opinions ».

Nicolas Gros-Verheyde (in Brussels)

Article published in Ouest-France on October 28, 2002

Document: theJudgment T-80/02 of the General Court