The European Competition Commissioner, Mr Mario Monti, has promised to overhaul the EU's merger review policy after a second, crushing defeat within one week in a European court. The Court of First Instance in Luxembourg ruled that Mr Monti was wrong to block Tetra Laval, the world's biggest packaging firm, from taking over the French bottle maker Sidel.
Mr Monti acknowledged that the ruling was a setback and promised to restore the Commission's credibility by improving its procedures for evaluating the potential impact of mergers and takeovers.
"Our record in the merger area is less glorious after these three court rulings. This is an important setback for us. We will recover your trust, and of the economic and legal communities, just rest assured of that," he said.
Earlier this week, the court overturned a Commission ban on French company Schneider Electric SA buying its rival, Legrand SA. This came after a June ruling that the Commission executive was wrong to stop the British travel group Airtours taking over its rival, First Choice.
Tetra Laval's chairman, Mr Goran Grosskopf, said yesterday that the company was determined to get the bid for Sidel back on track. This would mark the first time a company has completed a deal over the objections of the Commission by winning in court.
"We are very happy that the court has listened to us and has upheld our arguments. Now we need to go back to the Commission and reconfirm our intention to acquire Sidel. We hope for a speedy process this time. We believe that we can have a positive decision early next year," he said.
The court said that the Commission's economic analysis of the effects of the proposed merger was "based on insufficient evidence and some errors of assessment".
Mr Monti said yesterday that he was already working on broad reforms and he ruled out resigning from the Commission after the defeats. "I have been devoting all my energies in the last three years to this task and I will continue to do so, to steer the competition ship of the Commission, a ship which has served Europe well over the years. It is important to do so precisely when navigation becomes more rough," he said.
The Commission's succession of court defeats has heightened speculation that an EU ban on General Electric buying Honeywell could also be reversed.
Mr Monti said he saw no links between the court's rulings against the Commission and the fate of other cases, including an investigation into Microsoft's alleged abuse of a dominant position. "Just as it would be difficult to make comparisons between GE/Honeywell and Tetra/Sidel, I would like to emphasize that comparisons with the Microsoft case are not justifed and seek to confuse," he said.
