EU General Court annuls EC's decision on UPS, TNT merger
Staff Writer |
The United States company United Parcel Service (UPS) and the Netherlands company TNT Express operate on a global level in the specialist transport and logistics services sector.
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In the European Economic Area (EEA), UPS and TNT – as well as the United States company FedEx and the German company DHL – are present on the international express small package delivery markets (services involving an undertaking by the service provider to deliver small packages to another country in one day).
In 2012, UPS notified the European Commission of its proposed acquisition of TNT under the Merger Regulation.
By decision of January 30, 2013, 2 the Commission prohibited the proposed acquisition of TNT by UPS. In essence, it considered that that take-over would have restricted competition in 15 Member States as regards the express delivery of small packages to other European countries.
In those Member States, the acquisition would have reduced the number of significant players in that market to only three, or even two, sometimes leaving DHL as the only alternative to UPS.
The merger would therefore, according to the Commission, have likely harmed customers by causing price increases. UPS brought an action before the General Court seeking the annulment of the Commission’s decision. By today’s judgment, the General Court upholds the action and annuls the Commission’s decision.
The Court notes that observance of the rights of the defence and, in particular, the right to a fair hearing requires that the undertaking concerned must have been afforded 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 claims.
The Court finds that the econometric analysis used by the Commission in its decision of 30 January 2013 was based on an econometric model different from that which had been the subject of an exchange of views and arguments during the administrative procedure.
The Commission made non-negligible changes to the analyses previously discussed with UPS.
In view of those changes, the Commission was required to communicate the final econometric analysis model to UPS before adopting the contested decision. By failing to do so, the Commission infringed UPS’ rights of defence. ■