Judicial Review in Europe

THE ANTITRUST BULLETIN: Vo/. 51, No.
2/SM»imer 2006 : 339
Judicial review of merger control decisions

in the European Union*
BY FRANCISCO TODOROV" AND ANTHONY VALCKE***
I. INTRODUCTION
For a long time it has been commonly perceived that the decisions of
the European Commission (the Commission) appraising mergers
have, for many reasons, not been fully subjected to substantive
judicial review. Not only was the appeal process before the European
Court of First Instance (the CFI) seen as extremely lengthy (in any
case, too long for the parties to a merger to have to wait), but the CFI
was also considered to have granted a significant level of discretion—
some would say too much—to the Commission over its application of
economic analysis in merger decisions. However, this familiar
criticism now seems to have been partly addressed by recent
developments, for not only has the CFI introduced a fast-track
procedure to review certain merger decisions, but it has also become
* Originally published, in part, under the title Procedural Aspects of Judi-

cial Review of EC Merger Decisions, Winter 2003 LAWYERS EUROPE 7 (2003).
** Partner, Trench, Rossi e Watanabe Advogados (assodated with Baker
& McKenzie International), Brasilia.
*** Solicitor, London, England.
AUTHORS' NOTE: We wisli to express our gratitude for the invaluable assistance of
Marceio Maciel in the research ofthe precedents mentioned herein.
© 2006 by Federal Legal Publications, Inc.
340 : THE ANTITRUST BULLETIN: Vol. 51, NO. 2/Summer 2006
significantly more interventionist in reviewing the Commission's

substantive examination of mergers, as its overruling of the
Commission's decisions in the following cases in the last years seems
to indicate: Airtours v. Commission, Tetra Laval v. Commission, Schneider
Electric v. Commission, Lagardere and Canal+ v. Commission, MCI v.
Commission, and Impala v. Commission.^ This substantial evolution of
judicial review of merger decisions has renewed interest and debate
in the subject. This article will briefly describe the European
Communities institutional framework and the role of judicial review
within the European Communities in general. Later on, it addresses
certain procedural aspects of the current system of judicial review
inherent to the European Union merger review process and will, it is
hoped, serve as a useful guide to the process of judicial review of
merger control decisions in the European Union.
II. INSTITUTIONAL STRUCTURE OF COMPETITION

REGULATION IN THE EUROPEAN UNION
A. The institutions of the European Communities
The European Union (the EU) is usually thought of as being
composed of three pillars: (i) the European Communities (the EC); (ii)
a common foreign and security policy; and (iii) cooperation in justice
and home affairs. Of these three pillars, it is in the EC that we find the
institutions that conduct the regulatory and legislative activities of the
EU, the last two pillars being more akin to traditional means of
intergovernmental cooperation.
' Case T-342/99, Airtours v. Commission, 2002 E.C.R. 11-2585; Case

T-5/02, Tetra Laval BV v. Commission, 2002 E.C.R. 11-4382 (annulment of
prohibition decision); Case T80-02, Tetra Laval v. Commission, 2002 E.C.R.
II-45I9 (annulment of divestiture decision) and Case C-12/03 P, Commission
V. Tetra Laval, 2005 O.J. (C82) 1; Case T-310/01, Schneider Electric SA
V. Commission, 2002 E.C.R. 11-4071 (annulment of prohibition decision); Case
T-77/02, Schneider Electric v. Commission, 2002 E.C.R. 11-4201 (annulment
of divestiture decision); Case T-251/00, Lagardere and Canal+SA
V. Commission, 2002 E.C.R. 11-4825; Case T-310/00, MCI Inc. v. Commission,
2004 O.J. (C 300) 38; Case T-464/04, Impala v. Commission,
h t t p : / / c u r i a . e u r o p a . e u / j u r i s p / c g i - b i n / f o r m . pl?lang=EN&Submit
=rechercher&numaff=T-464/04 (Jul. 13, 2006).
JUDICIAL REVIEW IN THE EU : 341
The legal institutions within the EU are: (i) the Council of the
European Union (the Council); (ii) the European Parliament; (iii) the
Court of Auditors; (iv) the European Central Bank (the ECB); (v) the
European Court of Justice (the ECJ); and (vi) the Commission. Of
these institutions, two are of particular interest in the context of this
article: the Commission and the ECJ, and we will now briefly describe
their main activities.
B. The European Commission

"The Commission is first of all the 'driving force' behind
Community policy,"^ but it is also guardian of the Treaties that
compose the EU. The Commission is in charge of initiating the
legislative process within the EU. In addition, it is in charge of
overseeing the implementation of regulations of the Council by the
Member States, and may institute proceedings against Member
States for failure to comply with their obligations under the
Treaties. The Commission also conducts the EU's diplomatic policy.
It also has administrative and regulatory functions, "mainly in the
fields of the customs union, competition policy and safeguard
clauses."^
The Commission is composed of 25 members each with
responsibility for one or more policy areas of the EU. Prior to the
enlargement of the EU on May 1, 2004, there were 20 members, of
which the five largest Member States (Germany, United Kingdom,
France, Italy, and Spain) appointed two each, while each of the other
ten Member States appointed only one member. However, since the
EU enlargement, each of the 25 Member States now appoints only one
member of the Commission. Although they are nominated by the
Member States, the Commission members must exercise their
functions with complete autonomy: "[Tjhese nationals are not
representatives of the states. On the contrary, they have the duty and
the right to perform their tasks with complete independence in the
general interest of the Communities, and they are forbidden to seek
2 KLAUS DIETER BORCHARDT, THE ABC OF COMMUNITY LAW 45 (5th ed. 2000).
3 P.J.G. KAPTEYN & P. VERLOREN VAN THEMAAT, INTRODUCTION TO THE LAW

OF THE EUROPEAN COMMUNITIES 204 (3rd ed. 1998).
or take instructions from any governnient or other body."'' The

Commission is divided into several different departments
(Directorates-General), each with a specific function. The Directorate-
General for Competition, known by its acronym DG Comp, is in
charge of implementing EC competition law. Finally, it has certain
legislative functions, including in the competition field, which have
been delegated to it by the Council.
In the field of competition law, the Commission is in charge of
implementing the EC Treaty^ (namely Articles 81 and 82) and the
regulations that are enacted by the Council, such as the EC Merger
Regulation (ECMR).* In that capacity, the Commission has powers
and functions similar to those of national competition authorities in
the Member States, albeit on a pan-European scale. It investigates the
conduct of undertakings that may be anticompetitive (and imposes
fines on those undertakings found guilty of such violations), and it
reviews mergers that affect the EC market as a whole. The
Commission is also entitled to issue guidelines on competition law,
through which it informs the market how it will apply the various
rules contained in the EC Treaty and in the competition-related
regulations enacted by the Council. These guidelines serve as
important sources of direction to private parties of how they should
conduct their businesses in order to avoid investigation for
anticompetitive behavior.^
" Id. at 195.

5 Consolidated Version of the Treaty Establishing the European
Community, 2002 O.J. (C 325) 33 [hereinafter EC Treaty].
<> Council Reg. No. 139/2004, On the Control of Concentrations
Between Undertakings, 2004 O.J. (L 24) 1 [hereinafter ECMR].
^ For example, the Guidelines on Vertical Restraints—Commission
Notice of 13 October 2000, 2000 O.J. (C 291) 1—contain the entire
Commission's policy on vertical agreements, including guidance on the
application of its famous "block exemption," which excludes a significant
number of agreements from scrutiny, thus giving the business community a
relevant degree of legal certainty on business arrangements that might be
entered into.
C. The European Court of Justice and the

Court of First Instance
The ECJ is the judiciary of the EU. The main functions of the ECJ
are to "judge the acts and omissions of the Institutions and the
Member States in accordance with Community Law, and to ensure
uniformity of interpretation of Community law in the application of
this law by national courts."^ The ECJ will settle disputes between the
EU institutions and Member States, between Member States or the
institutions themselves and between the EU institutions and private
parties. In addition, the ECJ also issues "preliminary rulings," which
are aimed at guiding the national courts toward the correct and
uniform application of Community law whenever a dispute before a
national court involves the interpretation of Community law. The ECJ
may also issue legally binding opinions following a request by an EU
institution or a Member State on the conclusion of agreements
between the EU and non-EU states or international organizations.^
The ECJ is composed of 25 judges and 8 Advocates-General, who

are appointed by the Member States. Each Member State appoints one
judge. The Judges and the Advocates-General are appointed for a
renewable term of six years. According to Article 223 of the EC
Treaty, "[t]he Judges and Advocates-General of the Court of Justice
shall be chosen from persons whose independence is beyond doubt
and who possess the qualifications required for appointment to the
highest judicial offices in their respective countries or who are
jurisconsults of recognised competence...."
The ECJ is not the only judicial authority within the EC. The CFI
was created in 1989, following an amendment to the EC Treaty, to
assist the ECJ in dealing with the constant growth in judicial activity,
which had significantly slowed down the judicial process, especially
in the years leading up to the creation of the single market. The CFI is
not an autonomous EU institution, but rather forms part of the ECJ.
8 KAPTEYN, & VAN THEMAAT, supra note 3, at 258.

' See, e.g., the ECJ's Opinion on whether the EU should accede to the
European Convention on Human Rights (Opinion 2/94, Accession to the
European Convention on Human Rights, 1996 E.C.R. 1-1759).
344 : THE ANTITRUST BULLETIN: Vol. 51,NO. 2lSuTnmer 2006
The CEI is, as its name suggests, the court of first resort for judgments
on all direct actions against Community legal acts brought by
individuals and legal entities. Appeals from judgments of the CEI lie
before the ECJ, on points of law only (Article 225(1) of the EC Treaty).
Accordingly, all appeals against decisions of the Commission which
are brought by businesses regarding the application of EC
competition law are first heard by the CFI.
The CFI is currently composed of 25 judges.'" There are no
Advocates-General, but judges may be called to perform the role of
Advocate-General in a particular case if they are not part of the
chamber that is hearing the case in question. The Treaty of Nice,"
which came into force on February 1, 2003, inserts a new Article 225a
in the EC Treaty which allows the Council to create judicial panels "to
hear and determine at first instance certain classes of actions on
proceedings brought in specific areas" with a right of appeal to the
CFI on questions of fact and law.
III. JUDICIAL REVIEW OF EU MERGER DECISIONS

A. Judicial review in the EU
Article 230 of the EC Treaty establishes the jurisdiction of the ECJ
and of the CFI:
The Court of Justice shall review the legality of acts adopted jointly by
the European Parliament and the Council, of acts of the Council, of the
Commission and of the ECB, other than recommendations and opinions,
and of acts of the European Parliament intended to produce legal effects
vis-a-vis third parties. It shall for this purpose have jurisdiction in actions
brought by a Member State, the European Parliament, the Council or the
Commission on grounds of lack of competence, infringement of an essen-
tial procedural requirement, infringement of this Treaty or of any rule of
law relating to its application, or misuse of powers.
'» Article 224 of the EC Treaty determines that the CFI shall be
composed of at least one judge per Member State, although the actual
number of judges is determined by the Statute of the Court of Justice.
" Treaty of Nice Amending the Treaty on European Union, the Treaties
Establishing the European Communities and Certain Related Acts, 2001 O.J.
(C80)l.
Actions that are brought under Article 230 are called "actions for
annulment."'^
Unlike in the majority of international courts, private parties also
have standing before the ECJ and CFI, albeit in restricted
circumstances. The same Article 230 establishes that "[a]ny natural or
legal person may, under the same conditions, institute proceedings
against a decision addressed to that person or against a decision
which, although in the form of a regulation or a decision addressed to
another person, is of direct and individual concern to the former.""
Applicants before the ECJ and CFI are classified according to
three different categories in view of their ability to bring proceedings
before the European Courts: privileged, semiprivileged and non-
privileged applicants. The Member States, the Council, the European
Parliament and the Commission are privileged applicants. "In order
to bring an action under [Article 230] a privileged applicant need only
show that the measure it wishes to challenge is a 'reviewable act', [i.e.,
an act intended to produce legal effects vis-a-vis third parties other
than recommendations and opinions]. It is not necessary for it to
show that it has a specific interest to protect in bringing the action. It
is sufficient that the applicant alleges 'some genuine illegality with
some actual consequences'."'*
The Court of Auditors and the ECB are considered to be semi-
privileged applicants, in that, in addition to showing that the act to be
challenged is a "reviewable act," the semiprivileged applicant must
also show that such act affects the prerogatives of the applicant (for
example, the ECB does not have standing to challenge an act of the
Commission in the competition area). Finally, private parties (either
individuals or legal entities, even if from countries outside the EU)
are considered nonprivileged applicants. Nonprivileged applicants
12 There are also actions for "failure to act" under Article 232, which can
be brought whenever the Commission fails to act, and such failure amounts
to a violation of the EC Treaty. EC Treaty, supra note 5, at 127. Because these
actions are of no relevance for purposes of review of merger decisions in
which the Commission has acted, we shall not discuss them further.
13 EC Treaty, supra note 5, at 126.
'" MARK BREALEY & MARK HOSKINS, REMEDIES IN EC LAW 279 (2nd ed. 1998).
will only have standing before the ECJ or the CFI if they can
demonstrate that the decision to be challenged was either directed at
the applicant, or, although addressed to another person, is of "direct
and individual concern" to the applicant.
In competition cases (both merger and anticompetitive conduct)
this threshold will automatically be met when the applicant is
challenging a decision directed against it. Third parties that may be
affected by a merger may also, under certain circumstances, have
standing to appeal a Commission decision to the CFI. We now turn to
this issue in more detail and examine the overall procedural
framework that applies to legal challenges against the Commission's
merger decisions.
B. Judicial review of merger decisions

Appeals against merger decisions'^ of the Commission are
governed by the general provisions of the EC Treaty as regards the
annulment of EC legal instruments, in particular by the same Article
230 that governs all appeals against acts of EC institutions in general,
and by various statutes containing the bulk of procedural rules of the
proceedings before the ECJ and the CFI. The CFI has jurisdiction to
hear appeals brought by companies and individuals and a further
route of appeal lies before the ECJ.
As a result, those general EC Treaty provisions, and the case law
that has developed from them, determine the procedural aspects of
appeals in merger cases, namely the standing of applicants to
challenge merger decisions, the grounds of appeal, and the effects of
the CFI's judgments. Each of these procedural aspects will be
examined in turn.
In the field of competition law, it is now well established case law
that an applicant with standing may, under Article 230, challenge
"any measure which produces binding legal effects such as to affect
15 That is to say, decisions issued by the Commission under the new EC

Merger Regulation, which replaced the 1989 EC Merger Regulation, Council
Reg. No. 4064/1989 On the Control of Concentrations Between Undertakings,
1989 O.J. (L 395)1.
the interests of [the] applicant by bringing about a distinct change in

his legal position."^* We will see in more detail the kinds of measures
that merger parties and third parties are capable of challenging when
looking at their standing.
The first relevant question that we must address then is who is
entitled to bring an appeal against a merger decision and under what
circumstances.
1. STANDING OF MERGER PARTIES Article 230 allows two categories
of persons to bring an appeal against decisions of the Commission:
"natural or legal" persons who are addressees of the decisions (the
merger parties) and also persons, who, although not the subject of a
decision, are "directly and individually concerned by the decision"
(third parties). In the field of competition-related appeals, the CFI has
been more generous in the interpretation of this Treaty provision than
in other areas of EC law, so that as a result a wide range of persons
may have standing to appeal the Commission's merger decisions. We
will first look at the standing of merger parties before considering
third parties' standing.
Though it may be stating the obvious, the parties to a merger have
standing to bring an appeal against the Commission's findings since
they are the addressees of a decision clearing or prohibiting a merger.
However, an applicant will also have to display sufficient interest in
bringing an appeal against a decision, otherwise the appeal will be
declared inadmissible. The Court has stated on a number of occasions
that an applicant's interest in bringing an appeal will be sufficient,
and therefore the appeal admissible, only if annulment of the
Commission's decision "is of itself capable of producing legal
consequences."'7 Paradoxically, this means that the situations in
which the merger parties are able to bring an appeal are more limited
than for third parties.
"^ EC Treaty, supra note 5, at 126. See, e.g.. Case T-87/96, Assicurazioni
Generali SpA & Unicredito SpA v. Commission, 1999 E.C.R. 11-203, f 37, and
Case 60/81, IBM v. Commission, 1981 E.C.R. 2639 1 9.
1' See, e.g.. Case T-102/96, Gencor v. Commission, 1999 E.C.R. 11-753
140.
In particular, where a merger is cleared without conditions, the

parties will normally have nothing to ask of the CFI and thus will
have no legal interest in bringing any action. As a result, an action
brought by the parties to a merger that is cleared unconditionally
challenging the Commission's findings before the CFI will be
declared inadmissible. This was the outcome in Coca-Cola v.
Commission,^^ where Coca-Cola and one of its subsidiaries sought to
challenge the Commission's finding that its subsidiary (one of the
parties to the acquisition) had a dominant position in the soft-drinks
market in the UK. The CFI dismissed the appeal because it considered
that a finding that a company holds a dominant position did not
produce binding legal effects and was therefore not capable of being
challenged under Article 230.
In situations in which a merger is cleared subject to conditions, it is
arguable whether the merger parties would have standing before the CH
to challenge the commitments. It should be noted that an appeal against
commitments (brought by anyone) will only be admissible insofar as the
clearance decision is made conditional upon them. In the Coca-Cola case,
the subsidiary in question did offer a commitment to follow a certain
course of commercial conduct, but the Commission did not make it a
condition of clearance. As a result, Coca-Cola's appeal against the
behavioral undertaking offered by its subsidiary was declared
inadmissible, because "the contested undertaking has no binding legal
effects in the sense that a breach of its terms would not affect the
contested decision in any way and would not entail its revocation." ^^
'8 Joined Cases T-125/97 and T-127/97, Coca-Cola Co. & Coca-Cola Enter, v.
Commission, 2000 E.C.R. 11-1733. In the Coca-Cola case, the applicants appealed a
decision clearing the acquisition of sole control over a bottling joint venture they
had set up with Cadbury-Schweppes on the grounds that the Commission had
wrongly found that the applicants had a dominant position in the relevant
market. The appeal was found to be inadmissible, since the finding of a
dominant position did not have a "binding legal effect" on the applicants. The
CFI noted that as regards future concentrations, the Commission would have to
reassess the existence of a dominant position and could even reach a different
conclusion. In any case, the CFI concluded it would be open to the parties to
appeal any future decision in which a finding of the existence of a dominant
position would be central to a decision to block any future merger.
I" Coca-Cola, 2000 E.C.R. 11-1733 1106.
There is an additional argument to suggest that the parties to a

merger may not have standing to appeal commitments even when
they are made a condition of approval, since the commitments will
have been voluntarily put forth by them.ô In the Coca-Cola case, the
CFI hinted as much, although it did not take a position on this
matter. In its judgment, the CFI specifically refers to the argument
made by Coca-Cola's subsidiary at the oral hearing that "the
[commitment] in question was in fact a measure which it had taken
itself and could not, therefore, be the subject of an action for
annulment" before going on to limit itself solely to examining
Coca-Cola's arguments that the behavioral undertaking entered
into by its subsidiary should be annulled. As a result, it could be
argued on that basis that commitments that are entered into by the
parties emanate from the parties and therefore are not themselves
capable of being challenged because they do not, strictly speaking,
consist of an EC measure for the purpose of Article 230. The CFI's
decision in the Coca-Cola case certainly does not discourage this
interpretation."
However, many would suggest that this view does not reflect the
realities of the Commission's practice. Indeed, in the majority of
merger cases where commitments are given, this is the result of
negotiations between the parties and the Commission. In some cases,
the Commission may even apply pressure on the parties to enter into
commitments that go beyond what the parties would be interested in
proposing. Faced with a clear choice between the likelihood of a
decision launching an indepth investigation of the merger on even its
prohibition, and an alternative involving the giving of significant
undertakings, the parties may wish to opt for the "lesser evil," even if
they believe the transaction should be cleared without any conditions.22
2" Articles 6 and 8 of the ECMR speak of "commitments [the parties]

have entered into vis-a-vis the Commission."
21 See also Case T-342/00, Petrolessence & SG2R v. Commission, 2003
E.C.R. 11-1163138.
22 An interesting case decided by the CFI involved an acquisition of
joint control of Dutch cooperative CVK by Cementbouw and Handel. Case
T-282/02, Cementbouw Handel v. Commission, 2006 (C 96) 18. During
the discussions with the Commission for the approval of the merger, the
Considering that the available system for judicial review does not
guarantee a ruling in a timely fashion," submitting to the
Commission's pressure for significant commitments may be the only
practical alternative to giving up the merger altogether. In those
situations, the parties may claim that they have not freely entered
into the commitments, but rather were forced into "offering" them.
In this situation, the parties may well wish to appeal to the CFI,
claiming that the Commission's understanding that commitments
were necessary was a "manifest error of assessment," and request a
judgment that would enable the transaction to be cleared without
conditions (or with less significant commitments, as the case may
be).2^ A number of esteemed commentators certainly take the view
that it is possible to appeal the Commission's decision insofar as it
relates to commitments' being given in such circumstances. Bellamy
and Child clearly state that "the parties to a merger that is cleared
applicant parties offered certain commitments. Those commitments were

rejected by the Commission. Therefore, the parties submitted a second
offer of commitments, which were then accepted by the Commission. In
their appeal to the CFI, the parties argued that the Commission erred in
not accepting the first set of commitments, which led to the more
restrictive second set of commitments. In this case, the CFI stated that the
Commission had not in fact erred in rejecting the first offer of
undertakings. As to the second set, which was accepted, the CFI stated
that, although they did in fact go further than was necessary to restore
competition, the Commission did not have the discretion to reject them for
being too comprehensive. Therefore, it can be said that even in this case the
CEI did not recognize the possibility of a party's questioning the reach of
commitments voluntarily offered to the Commission. Actually, it may be
said that the CEI went further to state that the Commission itself was not in
a position to question commitments that gave more than necessary to
restore competition.
23 This is discussed in further detail in section III.B.5 below.
^'* It should be noted that the CFI has no powers to order the
substitution of alternative commitments, since it has unlimited jurisdiction
only with respect to penalties imposed by the Commission under the ECMR
by virtue of Article 229 of the EC Treaty. As a result, the parties will be able to
seek only annulment of the decision. In the event the appeal is successful, the
merger would then be the subject of a new investigation by the Commission.
See section in.B.4 below.
subject to commitments may challenge the Commission's insistence

on commitments being
Although the CFI has not yet had the opportunity to rule on such an
appeal against commitments, it seems that, if it were to accept such an
appeal, it would probably be in a situation in which the following three
conditions were satisfied: (i) the decision must make clearance conditional
upon the commitments' being fulfilled; (ii) the comn:utments must have
been "forced" on the parties by the Commission having rather than freely
entered into^ (the Commission exerted significant pressure on the parties
during the proceedings that led them to concede the commitments in
order to avoid the merger's being blocked); and (iii) the parties reserved
their position about the suitabihty of the commitments given to the
Commission (the parties' being able to show that they made their views
dear to the Commission that the commitments were not necessary as the
transaction did not present competition concems of such a nature as to
warrant them). This seems to be the view held by commentators such as
John Temple Lang, who argues that "[ljegally, a party to a merger can offer
^ CHRISTOPHER BELLAMY & GRAHAM CHILD, EUROPEAN COMMUNITY LAW OF

COMPETITION 460 (5th ed. 2001). It is to be noted, however, that in the
previously mentioned Cementbouw Handel, 2006 (C 96) 18, the CFI concluded
that the parties had not been forced by the Commission to offer the
commitments which were then accepted, even though it recognized that the
Commission had "exercised a certain influence on the terms of the
commitments proposed by the parties":
[I]t must be held that it has not been established that the notifying parties
were arbitrarily forced by the Commission to propose the corrective
measure consisting in the dissolution of CVK within a period of [deleted
as confidential] from the adoption of the contested decision. Nor is it
apparent from the documents in the case-file that the parties were
arbitrarily forced to propose the other corrective measures in their final
commitments designed to restore effective competition.
Id. n 314, 319.
26 See Cementbouw Handel, 2006 (C 96) 18, where the CFI stated that not
even the Commission could refuse to accept commitments that were more than
sufficient to address the competition concerns raised by the merger. In that
case, as indicated above, the Commission accepted a second set of offered
commitments, after rejecting a first set that had been offered by the parties for
being insufficient to address the competition concerns that had been identified.
an undertaking to the Commission, under protest, and if carrying out the

undertaking is made a condition of the decision, challenge the decision.''^''
Nonetheless there have so far been no appeals brought before the
CFI by merger parties solely against the commitments that have been
attached to a the merger.^s In any event, the fact that the Commission
may have "pressured" the parties to offer commitments does not
prevent the parties from refusing to offer commitments and from
taking their chances before the CFI—and the recent judgments may
certainly encourage that stance. However, this course of action could
only become a feasible strategy if and when a truly expedited judicial
review system is in place.^^
Another situation in which the parties to a merger may have
standing to sue is a case in which the proposed merger is cleared, but
the Commission considers certain related agreements not to be
"ancillary" to the merger.^" The parties could appeal to the CFI to
challenge the Commission's finding that the subsidiary agreements
cannot be approved as part of the overall clearance given to the merger.
^ John Temple Lang, Appealing Against Commission Decisions in

Merger Cases, Lecture to the British Chamber of Commerce, Brussels (July 2,
2001). The authors wish to express their gratitude to John Temple Lang for his
kind permission to reproduce extracts from his notes.
28 In his notes. Temple Lang acknowledges that "[i]n the more than 100
decisions conditional on fulfilment of undertakings, so far no party to a
merger has apparently attacked a condition based on an undertaking it had
offered." Id.
^' On the point of the currently prescriptive time span of proceedings in
merger appeals, see the discussion in section III.B.5 infra.
3° However, since May 1, 2004, under the terms of the new ECMR
(recital 21), the Commission, when requested by the merger parties, is obliged
to undertake an individual examination of ancillary restrictions only where
they present "novel or unresolved questions giving rise to genuine
uncertainty," namely restrictions contained in the merger agreement that are
not covered by the Commission's Notice on Restrictions Directly Related and
Necessary to Concentrations, 2005 O.J. (C 56) 24, or previous case law. In
other cases in which the restrictions do not present novel questions of law,
such as noncompete or nonsolicitation obligations placed on the vendor, the
Conimission will not carry out an individual assessment of the restrictions in
question, and any decision to approve a merger will "be deemed to cover
This is clear from the judgment in the Lagardere/Canal+ case.^^ In

this case, the CFI noted that the Commission's appraisal of ancillary
restrictions, which are examined solely under the ECMR, forms an
integral part of the final decision as to whether a merger is compatible
with the common market. The CFI ruled that a Commission decision
reversing its earlier conclusions contained in its original clearance
decision as to the ancillary nature of restrictions produces binding
legal effects and as such is capable of being challenged under Article
230. On the basis of this judgment, it is suggested that the parties to a
merger, although having obtained clearance from the Commission,
will nonetheless have standing to seek the annulment of that part of
the decision that deals with an appraisal of the ancillary nature of
restrictions contained in the merger agreement.^^
restrictions directly related and necessary to the implementation of the

concentration," as specified in Articles 6 and 8 of the ECMR.
31 The LagarderelCanal+ case. Case T-251/00, Lagardere and Canal+SA v.
Commission, 2002 E.C.R. 11-4825, concerned an appeal in the context of the
creation of full-function joint ventures in the media industry between
Lagardere, Canal+ and Liberty Media. The joint ventures were originally
cleared in a decision issued by the Commission in late June 2000 at the end of
phase I proceedings. The decision specifically recognized that certain
restrictior\s contained in the agreements were to be considered ancillary to the
concentrations. However, two weeks later, the Commission, claiming that it
was rectifying certain clerical errors contained in the original decision, issued a
second decision, which substituted entirely new wording in the section of the
decision dealing with ancillary restraints. The effect of this change was that
none of the restrictions were regarded as ancillary, except one relating to
certain preemption rights. The parties subsequently appealed the second
decision, claiming that the Commission lacked competence and had breached a
number of general principles of EC law. The CEI declared the action admissible
on the basis that the second decision (containing its appraisal of ancillary
restrictions) produced binding legal effects and was therefore capable of being
challenged under Article 230. The CEI annulled the second decision on the
basis that the Commission had infringed the general principles of legitimate
expectations in issuing this second decision and that it did not contain an
adequate statement of reasons for amending the original clearance decision.
^ However, as a result of changes made in the new ECMR that took
effect on May 1, 2004, such an appeal will only be possible in cases in which
the Commission nnakes an explicit assessment of ancillary restrictions which
present "novel or unresolved questions giving rise to genuine uncertainty. " In
Another situation in which the parties may have standing is if, for
example, the Commission refuses to review a transaction stating that
it is not a "concentration with a Community dimension" under the
ECMR. The claim to the CFI would be that the Commission infringed
the ECMR in not reviewing the merger. This was the case before the
CFI in the Generali decision.^^ The Commission did not consider that
the notified joint venture transaction was a "concentration" within
the meaning of the ECMR. Therefore, it did not issue a clearance or
prohibition. The parties appealed to the CFI claiming that the
Commission should have reviewed the transaction as a merger. The
Commission claimed that the parties had no standing on the grounds
that its decision not to review the merger was not a "final" decision;
the arrangement would still be analyzed under Article 81 pursuant to
the proceedings laid down by Regulation 17,3" and only the
conclusion of its analysis of the agreement in question under
Regulation 17 could be considered a decision that could be appealed.
However, the CFI differed with the Commission's view and
concluded that the parties did have standing to appeal, since the
decision to exclude the joint venture agreement from analysis under
the ECMR did affect their legal position. Nonetheless, the CFI rejected
the claims of the applicants on the merits.
The Commission's jurisdiction over a case could also be

challenged by the merger parties where the merger is referred back to
a Member State's national competition authorities on the basis that
the merger merely has national or local impact under Article 9 of the
ECMR. The parties may appeal such a decision on the basis that the
Commission infringed the ECMR in deciding to refer the merger, in
other cases in which the restrictions do not involve novel questions of law,
the Commission will not undertake a specific appraisal of any ancillary
restrictions contained in the merger agreement. As a result, in the absence of
any concrete assessment carried out by the Commission, the parties will have
no standing to challenge a clearance decision since the ancillary restrictions
will be deemed to have been approved.
33 Case T-87/96, Assicurazioni Generali & Unicredito v. Commission,
1999 E.C.R. 11-203.
34 Council Regulation 17/62/EEC of Eebruary 21, 1963 Implementing
Articles 81 and 82 of the EC Treaty, 1962 O.J. SPEC. ED. 87.
whole or in part, back to the requesting national competition

authorities. While there have been no cases on this point,^^ the CFI has
recently had to rule on appeals brought by third parties against
decisions of the Commission to refer merger cases to national
competition authorities. In the Philips and Cableuropa cases,^^ the CFI
made specific reference to its ruling in the Generali case,^^ which
concerned an appeal against the Commission's jurisdiction by the
parties to a transaction which the Commission considered fell outside
the scope of the ECMR. In these two cases, the CFI drew an analogy
to its Generali ruling and noted that the Commission's decision to
refer a merger back to the national competition authorities had the
same effect of excluding the merger from analysis under the ECMR,
thereby affecting the legal position of third parties by depriving them
of the procedural rights they derive from the ECMR.^s The CFI
observed that "every decision entailing a change in the legal system
applying to the examination of a concentration is capable of affecting
not only the legal situation of the parties to the operation in question,
as occurred in the [Generali case], but also that of third parties."^' On
the basis of these cases, it is arguably probable that the CFI would
recognize the standing of merger parties to bring a challenge against a
decision of the Commission to refer their merger to the national
competition authorities concerned.
35 An action was brought by Koninklijke BAM against the Commission's

decision to refer its acquisition of Hollandsche Beton to the Dutch authorities
under Case T-295/02, but the appeal was subsequently withdrawn. Case
T-295/02, Koninklijke BAM NBM N.V. v. Commission, 2002 O.J. (C 289) 65).
^ Case T-119/02, Royal Philips Electronics NV v. Commission, 2003
E.C.R.II-1433, where Philips sought to challenge the Commission's decision to
refer certain aspects of the merger to the French competition authorities, and
Joined Cases T-346 and 347/02 Cableuropa SA and others v. Commission,
2003 O.J. (C 304) 49, which concerned an appeal against the decision to refer
the whole of the merger between Sogecable, Canalsatellite and Via Digital to
the Spanish competition authorities.
3^ Generali, 1999 E.C.R. 11-203.
38 See Philips, 2003 E.C.R. 11-143311 280, 282, and Cableuropa, 2003 O.J. (C
304) 1157, 64.
3' Cableuropa, 2003 O.J. (C 304) 161.
356 : THE ANTITRUST BULLETIN: VO/. 51, NO. 2/Summer 2006
Finally, it goes without saying that merger parties will have standing
to challenge decisions to prohibit a merger, as in the Airtours, Tetra Laval,
and Schneider cases.'"' This wiU be the case even if the merger plans are
abandoned before the Commission adopts its formal prohibition
decision. In the MCI case^^ the CFI recognized the standing of merger
parties to bring an action for annulment of the Commission's decision to
prohibit Sprinf s acquisition by MCI (at the time WorldCom), despite the
fact that MCI and Sprint had withdrawn their merger filing one day
before the Commission issued its prohibition decision.
However, it is not only the merger parties themselves who can
seek the annulment of merger decisions, as third parties with an
interest may also have standing under Article 230. In the context of
third party appeals, the merger parties will have the right to
participate in such proceedings as intervening parties.''^
2. STANDING OF THIRD PARTIES Third parties who are affected by a
merger decision may also appeal to the CFI if they can show that the
decision in question is of direct and individual concern to them.
Although third parties will have to overcome an extra hurdle to
successfully submit an appeal against a Commission decision in a
merger, the array of decisions that they can challenge is, surprisingly,
broader than the decisions that can be appealed by the parties to a
merger themselves.*^ Third parties may challenge decisions to clear or
^ Case T-342/99, Airtours v. Con:imission, 2002 E.C.R. 11-2585; Case

T80-02, Tetra Laval v. Commission, 2002 E.C.R. 11-4519; Case T-5/02, Tetra
Laval BV v. Commission, 2002 E.C.R. 11-4382; Case T-310/01, Schneider
Electric SA v. Commission, 2002 E.C.R. 11-4201; Schneider Electric SA v.
Commission, 2002 E.C.R. 11-4071.
« Case T-310/00, MCI Inc. v. Commission, 2004 O.J. (C 300) 38.
"2 See, e.g., SEB's intervention in Cases T - n 4 / 0 2 , BaByliss v.
Commission, 2003 E.C.R. 11-1279, and T-119/02, Royal Philips Electronics v.
Commission, 2003 E.C.R. 11-1433, both of which concerned the Commission's
clearance of SEB's acquisition of its competitor Moulinex.
« This is also the case under Articles 81 and 82 of the EC Treaty. As the CEI
stated in the Duteh Banks case, which concemed Regulation 17: "[A) decision to
grant negative clearance pursuant to Article 2 of Regulation No. 17 at the request
of the undertakings and associations of undertakings concerned in which the
Commission states that, on the basis of the facts known to it there are no
to block a transaction and also decisions to clear a transaction with

conditions. (The conditions imposed may have a direct impact upon
third parties, or third parties may claim that such conditions were not
sufficient to neutralize the negative competitive impact of the
transaction."")
The issue is then to determine which third parties will be
considered as "directly and individually" concemed by a merger. The
ECJ began, as early as 1962, to lay down the circumstances in which a
third party would be accepted as having standing to challenge a
Commission decision in its famous Plaumann v. Gommission judgment:
"Persons other than those to whom a Decision is addressed may only
claim to be individually concerned if that Decision affects them by
reason of certain attributes which are peculiar to them or by reason of
circumstances in which they are differentiated from all other persons,
and by virtue of these factors distinguishes them individually just as
in the case of the person addressed.""*'
Another judgment seven years later shed further light onto this
matter:
The mere fact that a measure may exercise an influence on the competi-
tive relationships existing on a particular market cannot suffice to allow
any trader in any competitive relationship whatever with the addressee
of the measure to be regarded as directly and individually concerned by
grounds for it to take action under Article [81] or [82] of the Treaty . . .
satisfies the applicant and, by its very nature, can neither change his legal
position nor adversely affect his interests. By contrast, the granting of
negative clearance may prejudice the economic interests of a third party who,
if he demonstrates sufficient legal interest, is entitled to institute proceedings
for annulment before the Court of Eirst Instance in accordance with the
conditions set out in Article [230] of the Treaty." Case T-138/89, Nederlandse
Bankiersvereniging and Nederlandse Verenining van Banken v. Commission,
1992 E.C.R. 11-21811 32.
"" This was the motivation behind the challenges brought by Ineos and
EVC against the Commission's two clearance decisions in Shell/DEA, Case T-
99/02, Shell/DEA, 2003 O.J. (L 15) 35, and BP/E, Case T-103-02, BP/E.ON,
2002 O.J. (L276) 31, which have since been abandoned.
« Case 25/62, Plaumann v. Commission, 1963 E.C.R. SPEC. ED 95. This
precedent was reaffirmed by the CEI in several recent cases. See Case T-374/00,
Verband der Ereien Rohrwerke eV v. Commission, 2003 (C 213) 55 Tl 49.
that measure. Only the existence of specific circumstances may enable a

person subject to Community law and claiming that the measure affects
his position on the market to bring proceedings under Article [230].''*
In the field of competition law, the ECJ and the CFI have
interpreted the concept of "direct and individual concern" quite
broadly, with the result that it is relatively easier for third parties to
bring appeals against decisions under the ECMR or those applying
Articles 81 and 82 than to challenge other EC measures outside the
ambit of competition law.
For the sake of completeness, we distinguish third parties further
between competitors and other third parties who may have an
interest in bringing merger appeals.
a) Third parties: eompetitors Third party competitors will usually be
considered to be "directly and individually" concerned by a merger
decision. In Air France v. Gommission,'^'^ the CFI considered Air France,
a competitor contesting the decision to clear the merger between
British Airways (BA) and Dan Air, to be sufficiently "directly and
individually" affected by the decision to apply for its annulment
because of its particular situation vis-a-vis its merging competitors,
BA and Dan Air, and also compared to its other competitors. The
CFI's reasoning is worth setting out in full:
[T]he situation of Air Erance is clearly different, having regard to the con-
centration in issue, from that of other international air carriers. The con-
centration leads to the substitution of BA for Dan Air on the regular
routes operated by the latter. It appears that the air links involved con-
cern connections, first, between Erance and the United Kingdom and, sec-
ondly, between Belgium and the United Kingdom. . . . By virtue of the
acquisition of Dan Air, BA's position on all those routes is significantly
stronger, whereas the competitive position of the Air France group has
"•* Joined Cases 10 and 18/68, Societa 'Eridania' Zuccherifici Nazionali

and others v. Commission, 1969 E.C.R. 459 1 7. Although the decision was
not taken in the context of a merger or a competition law dispute, the ruling
and subsequent case law that require applicants to possess "certain attributes
which are peculiar to them or show the existence of circumstances in which
they are differentiated from all other persons, and which distinguish them
individually" to the same extent as the addressee applies to all appeals under
Article 230 brought by persons other than the addressee.
47 Case T-3/93, Air Erance v. Commission, 1994 E.C.R. 11-00121 "H 82.
been correspondingly affected in a manner which distinguishes it indi-

vidually from any other air carrier. In those circumstances. Air France's
position is comparable to that of an addressee of the decision, within the
meaning of the Plaumann judgment. Consequently, the [CEI] considers
that Air Erance has sufficiently established that the contested act clearly
alters its position in the market and that it is of direct and individual con-
cem to it ''8
In Air France's parallel action against the Commission's decision

clearing BA's acquisition of TAT,-*' the CFI also gave particular weight
to the fact that Air France had participated in the merger proceedings
as an interested third partyô and that the Commission mainly took
into account Air France's competing position on the air routes in the
challenged decision. Therefore, competitors v^ho exercise their
procedural rights under the ECMR will probably be seen as being
« Id.
« Case T-2/93, Air Erance v. Commission, 1994 E.C.R. 11-0323 n 44^8.
^ The same weight was given to recognize standing of third parties in
appeals in Case T-374/00, Verband der Ereien Rohrwerke eV v. Commission,
2003 (C 213) 55 and in Case T-158/00, Arbeitsgemeinschaft der offentlich-
rechtlichen Rundfunkanstalten der Bundesrepublik Deutschland (ARD) v.
Commission, 2003 (C 304) 39. In the latter, the Commission stated that active
participation alone is not sufficient to establish a "direct and individual"
concern, but it obviously helps:
Although, as rightly pointed out by the Commission, mere participation
in the procedure is indeed not by itself sufficient to establish that the
applicant is individually concemed by the decision, especially in the field
of concentrations, the thorough examination of which requires contact
with numerous undertakings, active participation in the administrative
procedure is a factor to be taken into consideration, inter alia, in the more
specific field of control of mergers, in establishing, in the light of other
specific circumstances, whether an action is admissible (BaByliss v
Commission, paragraph 95). This is all the more so in this case where, as
found above, that active participation had an effect on the course of the
procedure and, at least in part, on the content of the contested decision,
both as regards the tinding that the merger raised serious doubts and as
regards the commitments necessary, in the Commission's view, to dispel
those doubts.
Id. 1 76. See also the very recent decision of the CEI in Case T-177/04, easyjet
Airline v. Commission, http://eur-lex.europa.eu/LexUriServ/LexUriServ
.do?uri=CELEX:DKEY=429256:EN:NOT (Jul. 4, 2006).
360 : THE ANTITRUST BULLETIN: VO/. 51, NO. 2/Summer 2006
"directly and individually"5i concemed by the merger decision they

seek to challenge.
Competitors have been found to be directly and individually
affected by a decision to clear a merger (whether or not it is subject to
conditions),52 [^ relation to the commitments that are attached to a
clearance decision where they are insufficient to address competition
issues,53 or even as regards a decision to refer a concentration—
51 In Verband, 2003 (C 213) 55, as well as in other recent cases, the CEI
analyzed the two criteria separately, suggesting that in certain occasions a
decision may be of direct, but not individual concem to a third party, or vice-
versa. In tfiose cases, the standing of such third parties would not be
recognized. In easyjet Airline, Case T-177/04, for example, the CFI stated: "It
follows that the applicant is directly concerned by the contested decision."
And, just after that, the court concluded: "It is therefore necessary to
determine whether the applicant is also individually concerned by the
contested decision." Id. n 32-33.
52 See, e.g.. Air France, 1994 E.C.R. 11-00121 (challenge to BA's acquisition
of Dan Air) and Air France, 1994 E.C.R. 11-0323 (challenge to BA's acquisition
of TAT); and more recently BaByliss's appeal against the Commission's
clearance of SEB/Moulinex merger in Case T-114/02, BaByliss v. Commission,
2003 E.C.R. 11-1279. Most recently, see Case T-464/04, Impala v. Commission,
http://curia.europa.eu/jurisp/cgi-bin/form.pl?lang=EN&Submit
=rechercher&numaff=T-464/04 (Jul. 13, 2006), in which the third party appeal
before the CEI against a clearance decision was successful.
53 See, e.g., BaByliss, 2003 E.C.R. 11-1279. This case concerned the
SEB/Moulinex merger, which the Commission had cleared subject to
commitments in respect of affected markets in Austria, Belgium, Denmark,
Germany, Greece, the Netherlands, Norway, Portugal, and Sweden. The CEI
annulled in part the clearance decision because it found that the Commission
had incorrectly concluded that there were no serious doubts as to the
compatibility with the common market of a number of affected markets in
electrical appliances in Einland, Ireland, Italy, Spain, and the UK and
accordingly had failed to require commitments in respect of these affected
markets. In easyjet Airline, a third party in the review process involving the
merger between Air Erance and KLM appealed a Commission decision that
cleared the merger subject to commitments that were offered by the merging
parties, arguing that such commitments were insufficient to solve competition
concerns raised by the merger. The CEI recognized easyjef s standing to sue the
Commission, but did not agree with its arguments, concluding that there was no
indication that the Commission had committed manifest errors in its assessment
of the impact of the merger with the commitments that were offered.
whether in whole or in part—to national competition authorities

under Article 9 of the
b) Third parties: other interested parties In addition, any party that
has been granted specific procedural rights under the ECMR,^^ will be
able to bring an appeal to the CFI, even if only to protect these
procedural rights. For example, if the Commission does not respect
the rights of a certain group of stakeholders to be heard during the
review of a merger, the group will be entitled to appeal to the CFI to
see these rights enforced. However, if such procedural rights are
respected, they will probably not have standing to challenge the
substantive aspects of the Commission's decision (unless they also
meet the other criteria contained in Article 230 of the EC Treaty).
That appears also to be the case for employee representatives. In
the Perrier Employee Representatives cases,^* the CFI did not recognize
the right of the applicants (employee representatives) to challenge the
substantive aspects of the Commission decision in the case, even
though the ECMR established the right of employees/representatives
of undertakings in a merger to be heard by the Commission during
the review process. The CFI stated that the employees would be
entitled to request annulment of the decision only if their procedural
5^ See, e.g., Philips's appeal against the Commission's decision to refer

part of the SEB/Moulinex merger to the Erench competition authorities in
Case T-119/02, Royal Philips Electronics NV v. Commission, 2003 E.C.R.II-
1433 n 267-300. The action failed on the merits. See also Case T-346 and
247/02, Cableuropa SA and others v. Commission, 2003 O.J. (C 304) 49,
concerning an appeal by broadcasting companies against the Commission's
decision to refer the Sogecable/Canalsatellite/Via Digital media merger to
the Spanish authorities in its entirety, which also failed on the merits.
55 Article 18(4) provides: "Natural or legal persons showing a sufficient
interest and especially members of the administrative or management bodies
of the undertakings concerned or the recognized representatives of their
employees shall be entitled, upon application, to be heard." ECMR, supra note
6, at 16.
56 Case T-96/92, Comite d'Entreprise de la Societe Generate des Grandes

Sources and others v. Commission, 1995 E.C.R. 11-1213 and Case T-12/93,
Comite Central d'Enterprise de la Societe Anonyme Vittel and others v.
Commission, 1995 E.C.R. 11-1247, which both concerned Nestle's acquisition
of Perrier.
362 : THE ANTITRUST BULLETIN: Vol. 51, No. 2/Summer 2006
rights had not been respected. However, such a right did not extend
to requesting the review of the substantive elements contained in the
decision reached by the Commission, even if clearance of the merger
was made conditional upon divestiture of part of a business
amounting to a "transfer of an undertaking" to which the Transfer of
Undertakings (Protection of Employment) Directives^ may apply.
Shareholders of undertakings to a merger will not usually have
standing before the CFI as applicants in a request for annulment of a
merger decision. The CFI's ruling in Zunis Holding case,^^ succinctly
addresses the standing of minority shareholders:
[T]he mere fact that [a Commission decision declaring that a concentration
does not come within the scope of the ECMR] may affect the relations
between the different shareholders of [the target] company does not of
itself mean that any individual shareholder can be regarded as directly and
individually concerned by that [decision].... A finding . . . that a concen-
tration notified to it does not fall within [the ECMR] is not of such a nature
as by itself to affect the substance or extent of the rights of those sharehold-
ers, either as regards their proprietary rights or the ability to participate in
the company management conferred on them by such rights.... The deci-
sion finding that the concentration notified does not fall within the scope of
[the ECMR] affects the applicants, in their capacity as shareholders [of the
target company], in the same way as any other of the [140,000] or so share-
holders of that company. . . . It follows that the Commission decision . . .
cannot concern the applicants individually, in particular because their
respective shareholdings in the capital of [the target company] at the mate-
rial time each represented less than 0.5% of the share capital and because
they have failed to prove that by reason of that decision they were placed
in a different position to that of any other shareholder.5'
More recently, the CFI has addressed the position of third parties
w h o become involved in postmerger negotiations r e g a r d i n g the
57 Council Directive 2001/23,2001 O.J. (L 82) 16 (previously Directive

77/187), on the Approximation of the Laws of the Member States Relating to
the Safeguarding of Employees' Rights in the Event of Transfers of
Undertakings, Businesses or Parts of Undertakings or Businesses.
58 Case T-83/92, Zunis Holding, Einna Sri & Massinvest SA v.
Commission, 1993 E.C.R. 11-1169, which concerned the Commission's
decision that Mediobanca's increase in its shareholding in Generali did not
fall within the scope of the ECMR.
5' Id. n 34-36.

fulfillment of connnrutments. The Petrolessence case^ concemed an appeal

brought by a potential purchaser of a divested business in the context of
the TotalFina/Elf Aquitaine merger, which was cleared subject to
commitments. One of these commitments required TotalFinaElf to
divest itself of approximately 70 road-side petrol stations located on
French motorways. Following clearance, TotalFinaElf made a proposal
to the Commission regarding the divestment, including the sale of six
petrol stations to Petrolessence's subsidiary SG2R which operates road-
side restaurants. However, the Commission rejected TotalFinaElf's
proposal because it did not believe that Petrolessence was a suitable
purchaser since it would not be "capable of maintaining or developing
effective competition" in the relevant market, given that it was not at
that time active in the sale of petrol. TotalFinaElf subsequently found
other potential purchasers that were approved by the Commission.
Petrolessence and its subsidiary then appealed the Commission's
rejection of TotalFinaElf s initial proposal.
The CFI ruled that the appeal was admissible, since the
Commission's rejection of TotalFinaElf's initial proposal was a
measure that could be challenged because it brought about a distinct
change in Petrolessence's legal position. In its ruling, the CFI noted
that the Commission's decision to clear TotalFina's acquisition of Elf
Aquitaine was specifically made conditional upon a number of
commitments including the divestment of the 70 petrol stations to one
or more purchasers who needed to be approved by the Commission.
The CFI concluded that Petrolessence had an interest in bringing the
appeal since, as a result of the Commission's rejection, Petrolessence
was excluded from the scope of the contractual negotiations with
TotalFinaElf's divestment of its 70 petrol stations. However,
Petrolessence then lost the appeal on its merits.
In a recent decision, the CFI recognized the standing to sue of
ARD against a merger decision involving a concentration between
Kirch Pay TV and BSkyB. ARD, a TV broadcaster, was not found to be
even a potential competitor of the merging parties. Even so, the
appeal was found to be admissible by the CFI:
« Case T-342/00, Petrolessence & SG2R v. Commission, 2003 E.C.R. 11-

1163.
[T]he fact that the applicant cannot be considered to be a competitor, or

even a potential competitor of KirchPayTV on the pay-TV market, does
not necessarily mean that it is not individually concemed by the decision.
Although KirchPayTV is mostly active in pay-TV, that market is only one
of the three markets on which the Commission found that the merger
strengthened the Kirch group's dominant position. Moreover, in the
same way as potential competitors of the parties to the concentration may
have standing to apply for annulment of an approval decision in the case
of oligopolistic markets (see, to that effect. Case T-290/94 Kaysersberg v
Commission [1997] ECR 11-2137; and BaByliss v Commission . . .), where, as
in the present case, an undertaking holding a monopoly sees its position
strengthened by a concentration, an action for annulment brought by an
operator present only on neighbouring upstream or downstream markets
may, in certain circumstances, also be admissible.*^
However, ARD lost the appeal on the merits.

3. GROUNDS FOR APPEAL There are four grounds for appeal from a
Commission action in a merger decision (as in any other action for
annulment), according to Article 230 of the EC Treaty: (i) lack of
competence; (ii) infringement of an essential procedural requirement;
(iii) infringement of the EC Treaty or of any rule of law relating to its
application; and (iv) misuse of powers. We will look at the first three
of these grounds since the last ground is rarely proved.
a) Lack of Competence If the Commission acts outside the powers

granted to it by the EC Treaty and secondary legislation, then its
decision may be annulled for lack of competence. In the merger
scenario, it is more difficult to identify a case in which an appeal
would be brought and won solely on the matter of lack of competence
of the Commission.
Given that the Commission has exclusive competence to apply the
ECMR, the Commission is prima facie competent to apply its provisions
and issue decisions on a merger that consists of a concentration with
an EC dimension. In Lagardere/Ganal+ v. Gommission,^'^ it is interesting
« Case T-158/00, Arbeitsgemeinschaft der offentlich-rechtlichen

Rundfunkanstalten der Bundesrepublik Deutschland (ARD) v. Commission,
2003 (C 304) 39 T[ 78.
(•^ Case T-251/00, Lagardere and Canal+SA v. Commission, 2002 E.C.R.
11-4825 «128-131.
to note that the CFI specifically rejected the applicant's claim that the
Commission lacked the power to issue a decision revoking its findings
that certain restrictions were ancillary to the notified merger, even
though its decision did not fall within any of the provisions of the
ECMR entitling it to revoke earlier decisions. In Gencor v. Commission,^
the applicant's argument that the Commission lacked competence to
review a foreign-to-foreign merger was also dismissed. Similarly, the
CFI also ruled in Kesko v. Commission^* that the Commission is
competent to analyze a merger that does not have an EC dimension
when requested to do so by a national competition authority under
Article 22 of the ECMR. In Schneider v. Commission,^ the CFI confirmed
the Commission's power to extend the four-month time limit for
conducting an in-depth phase II merger review in exceptional
circumstances, such as when awaiting a response to its Article 11(5)
decision to request further information. The ruling of the ECJ in the
Cimpor-Cimentos^ case confirmed the Commission's power to determine
the legality of any measures taken by Member States to protect national
legitimate interests under Article 21(4) of the ECMR.
b) Procedural Defects A merger decision can also be annulled on

the basis of procedural defects. However, not every procedural
default will lead to annulment—the procedural requirement violated
has to be "essential." The CFI will need to be satisfied that the absence
« Case T-102/96, Gencor v. Commission, 1999 E.C.R. 11-753 Ti 78-88.

M Case T-22/97, Kesko Oy v. Commission, 1999 E.C.R. 11-3775, which
concerned the Finnish authorities' decision to refer Kesko's acquisition of
Tuko to the Commission, which subsequently blocked it.
•» Case T-310/01, Schneider Electric SA v. Commission, 2002 E.C.R. II-
4071 n 94-113.
<* Case C-42/01, Portuguese Republic v. Commission, 2004 O.J. (C 201)
1, which concerned the Portuguese government's decision to refuse to
approve the acquisition of Cimpor-Cimentos by Spanish and Swiss investors
on the basis that the acquisition would have entailed the withdrawal of
Cimpor-Cimentos from the Portuguese financial markets contrary to the
Portuguese government's reform plans for the industry. The Commission
made a decision finding that the Portuguese government's reasons for
refusing to approve the merger could not be considered as national legitimate
interests within the meaning of Article 21 of the ECMR.
366 : THE ANTITRUST BULLETIN: Vol. 51,'NO. 21Summer 2006
of the procedural defect would have led the Commission to adopt a

different decision.^'' In the merger context, the procedural irregularity
that may open a decision to annulment may be classified as either (i)
lack of adequate reasoning for the decision or (ii) violation of
procedural rights of the merger parties or authorized third parties.
The obligation to state the reasons for its decisions is established
directly by the EC Treaty. Article 253 states that:
Regulations, directives and decisions adopted jointly by the European
Parliament and the Council, and such acts adopted by the Council or the
Commission, shall state the reasons on which they are based and shall
refer to any proposals or opinions which were required to be obtained
pursuant to this Treaty.**
The reasons do not have to be extensive. They have to be
"sufficient" for the case at hand (which, of course, means that more
complex cases require more detailed reasoning than simpler cases).
As the CFI recalled in Lagardere/Canal-\- v. Commission,^ both the ECJ
and the CFI have consistently held that the requirement to state
adequate reasons implies that the Commission's reasons contained in
a merger decision must clearly and imequivocally show its reasoning
that led it to issue the decision. The purpose of such a requirement is
two-fold. First, it allows the parties concemed to determine whether
67 In Case T-209/01, Honeywell v. Commission, 2006 O.J. (C 48) 26, the

CFI did not accept an argument of violation of procedural rights because the
violation was insufficient to cause a change in the final decision of the
Commission:
The alleged infringement of the rights of the defence in this case relates
exclusively to the aspects of the contested decision which the applicant
has challenged in other respects in its other pleas in law, namely
bundling and cross-subsidisation. Even if the present plea were well
founded, it could therefore undermine only the pillars of the
Commission's reasoning against which those other pleas are also
directed. The present plea cannot therefore have any effect on the other
pillars constituting the foundation of the contested decision.
Id. Tl 126.
M EC Treaty, supra note 5, at 135.
« Lagardere, 2002 E.C.R. 11-4825.
the act is well-founded or, on the contrary, whether it contains

procedural defects that will allow the parties to challenge the
decision. Secondly, it also permits the European Courts to exercise
their powers of judicial review over the decision.^" j h e absence of a
sufficient statement of reasons will usually therefore lead to the
annulment of the decision being appealed.
In Impala v. Commission,''^ the CFI accepted the argument raised by
Impala, a third party who contested the Commission decision to clear
the Sony/BMG merger, that the Commission had not presented suffi-
cient reasoning to justify its conclusion that the merger would not
result in a situation of collective dominance, since discounts that were
given in the market, especially campaign discounts, prevented the
market from having enough transparency to generate collective domi-
nance. The CFI also found that the Commission had committed
"manifest errors of assessment," which then led the Court to annul
the Commission decision, reverting the case for further analysis.
As regards the right to be heard, the ECMR entitles the applicants
and certain third parties to express their views to the Commission
during a merger review. Failure to grant such parties the opportunity
to present their views will lead to annulment of the decision (in whole
or in part, if it is possible to make such a distinction in a particular
case) only where the CFI is satisfied that the Commission would have
adopted a finding that is substantially different had the party
concerned properly exercised its right to be heard by the
Commission. That, of course, means that not all breaches of the
Commission's obligation to hear interested parties in a merger
procedure will necessarily lead to annulment of the decision. In the
Kaysersberg case, the CFI explained how it interpreted minor
procedural errors during the merger review process:
[I]n the context of the control of concentrations between undertakings
established by [the ECMR] the failure to comply with the period of notice
for convening [an Advisory Committee established by Article 19 of the
™ Id. J 155.
'1 Case T-464/04, Impala v. Commission, http://curia.europa.eu/jurisp
/cgi-bin/form.pl?lang=EN&Submit=rechercher&numaff=T-464/04 (Jul. 13,
2006).
ECMR and composed of representatives of the Member States, which

issues opinions on the Commission's draft decisions that review concentra-
tions that may create or strengthen a dominant position] is not in itself such
as to render the Commission's final decision unlawful, even in the absence
of exceptional circumstances relating to the risk of serious harm within the
meaning of Article 19(5) of that regulation... . The failure to comply with
such a rule can render the Commission's final decision unlawful only if it is
sufficiently substantial and it had a harmful effect on the legal and factual
situation of the party alleging a procedural irregularity.'^
This is also the case with respect to the obligation to grant the
merger parties access to the file. Accordingly, where the Commission
fails to disclose certain documents, the CFI will conclude that the
parties' rights of defense have been infringed where "non-disclosure of
the documents in question might have influenced the course of the
procedure and the content of the decision to the [parties'] detriment."^
72 Case T-290/94, Kaysersberg v. Commission, 1997 E.C.R. 11-2137 f 88,

which concemed a challenge to the Procter & Gamble/Schickendanz decision.
Case IV/M.430, Procter & Gamble/ VP Schickendanz, 1994 O.J. (L 352) 32.
" Case T-5/02, Tetra Laval BV v. Commission, 2002 E.C.R. 11-4382 % 90
(annulment of prohibition decision). In Case T-210/01, General Electric v.
Commission, 2006 O.J. (C 48) 26-27, the CFI makes a distinction between
"adverse" and "favourable" evidence, ruling that all "favourable" evidence
should be made available to the parties for use in their defense, while
"adverse" evidence should be made available in so far as it is relied upon by
the Commission. The CFI found that the Commission correctly dealt with the
documentation in that case.
See also Case T-374/00, Verband der Freien Rohrwerke eV v.
Commission, 2003 (C 213) 55, in which the CH stated:
With regard to the request for production of the administrative file for
the concentration at issue, although, as the applicants claim, the
Commission and the interveners cannot rely on documents to which
neither the Court nor the applicants have had access, it must be observed
that this circumstance alone does not, as such, justify an order by the
[CFI] for the production of documents on the basis of Article 64 of the
Rules of Procedure. The [CFI] may order such a measure for the
organisation of procedure only if the applicants make out a plausible case
that the documents are necessary and relevant for the purposes of
judgment. In the present case the applicants have made no submissions
at all to that effect.
Id. 1 201.
The merger parties' procedural rights also require that the

Commission ensure that it has given the parties an opportunity to
respond to the Commission's concerns before issuing its final
decision, including the opportunity to propose commitments to
remedy these concerns, which is the dual purpose of the statement
of objections (SO). This means that where the final findings
contained in the Commission's mergers decision are concerns that
were not at all mentioned in the SO, the CFI is likely to annul the
decision for infringement of the parties' rights to a defense. This was
the case in Schneider v. Commission, where the Court found that, as
regards the affected French markets (in respect of which the
Commission's economic analysis was upheld), there was a
substantial difference in the nature of the concerns identified in the
SO and those contained in the final decision, thereby depriving the
parties of the opportunity to effectively respond to these concerns
and propose commitments.^^
c) Infringement of EC law Another ground for appeal against a
Commission decision would be a violation of the EC Treaty (or of its
related rules and regulations) and general principles of EC law. In
effect, this is the basis for review of a Commission decision on its
merits. Article 2(3) of the ECMR establishes that "a concentration
which creates or strengthens a dominant position as a result of
which effective competition would be significantly impeded in the
common market or in a substantial part of it shall be declared
incompatible with the common market." On the other hand. Article
2(2) of the ECMR—the flip side of Article 2(3)—states that "a
concentration which does not create or strengthen a dominant
position as a result of which effective competition would be
significantly impeded in the common market or in a substantial part
of it shall be declared compatible with the common market."
Together Articles 2(2) and 2(3) make up the substantive test to be
applied under the ECMR. Therefore, a disagreement over the final
decision on a merger review, in principle, will rest on the whether
or not the Commission correctly applied the substantive test
contained in these two articles.
'" Case T-310/01, Schneider Electric SA v. Commission, 2002 E.C.R. II-

4071 m 439^63 (annulment of prohibition decision).
In fact, however, a judgment of the CFI cancelling a previous

decision of the Commission on these grounds will usually result from
the CEI's conclusion that the Commission's legal findings are not
supported by the evidence and that it has failed to discharge the
burden of proving its case. In other words, the CEI must determine
whether, based on the facts available, the Commission's application
of the substantive test was justified. In the end, in appeals relating to
prohibition decisions, the question becomes whether or not the
Commission has proved that the merger will create or strengthen a
dominant position that "significantly impedes" competition in the
relevant market.''^
A claimant in such an appeal has traditionally had to meet a
significant burden, as the level of discretion that has been granted to
the Commission over the economic analysis of the relevant facts was
particularly wide in its scope.^* This is not discretion in the sense that
the CEI is legally barred from fully reviewing the economic analysis
undergone by the Commission, as its judgments in Airtours, Tetra Laval,
Schneider, Ceneral Electric, and Impala'" indicate. However, the European
Courts themselves have over the years traditionally recognized that the
Commission has the expertise and resources necessary to correctly
review the economics underlying merger cases.^
'^ If a Commission decision is based on several grounds, then to be suc-

cessful, an appellant party must demonstrate that each and every ground is
invalid for some reason. In General Electric, 2006 O.J. (C 48) 26-27, the CFI
agreed with some of the arguments presented by General Electric, but not all,
which was sufficient for the appeal to be rejected.
'* Recent rulings, however, have somewhat reduced the perceived level
of discretion.
^ Case T-342/99, Airtours v. Commission, 2002 E.C.R. 11-2585; Tetra
Laval, 2002 E.C.R. 11-4519; Schneider, 2002 E.C.R. 11-4201; General Electric, 2006
O.J. (C 48) 26-27; Case T-464/04, Impala v. Commission, http://curia
.europa.eu/jurisp/cgi-bin/form.pl?lang=EN&Submit=rechercher
&numaff=T-464/04 (Jul. 13, 2006).
78 See Verband, 2003 (C 213) 55 1105:
First, it must be observed that the basic provisions of Regulation
No 4064/89, in particular Article 2 thereof, confer a discretion on the
Commission, especially with respect to assessments of an economic
nature. Consequently, review by the [ECl judicature of the exercise of
The scope of the Commission's discretion in merger cases, and the

extent to which it will be scrutinized in any subsequent judicial
appeal, were explained in the Tetra Laval case. The CEI noted that the
substantive test contained in the ECMR "confer[sj on the Commission
a certain discretion, especially to assessments of an economic nature.
Consequently review by the Community judicature of the exercise of
that discretion . . . must take account of the discretionary margin
implicit in the provisions of an economic nature which form part of
the rules on concentrations."''^ That does not mean, however, that the
Courts are prevented from reviewing arguments of an economic
nature. To the contrary, the ECJ has recently expressly asserted this
right, when reviewing the appeal of the Commission against the CEI
decision in Tetra Laval:
Whilst the Court recognises that the Commission has a margin of discre-
tion with regard to economic matters, that does not mean that the [EC]
Courts must refrain from reviewing the Commission's interpretation of
information of an economic nature. Not only must the [EC] Courts, inter
alia, establish whether the evidence relied on is factually accurate, reli-
able and consistent but also whether that evidence contains all the infor-
mation which must be taken into account in order to assess a complex
situation and whether it is capable of substantiating the conclusions
drawn from it.^"
The degree of discretion granted to the Commission varies depending

on the level of novelty of the issues under discussion. Eor instance,
claimants will very rarely be able to successfully contest a decision by
the Commission on market definition.î The CEI recognizes the
Commission's capacity to correctly apply the economic principles
that discretion, which is essential for defining the rules on concentrations,

must take account of the discretionary margin implicit in the provisions
of an economic nature which form part of the rules on concentrations.
See also Case T-177/04, easyjet Airline v. Commission, h t t p : / / e u r -
lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:DKEY=429256:EN:NO
T (Jul. 4, 2006) f 44.
7» Case T-5/02 Tetra Laval BV v. Commission, 2002 E.C.R. 11-4382 1119.
80 Case C-12/03, Commission v. Tetra Laval, 2005 O.J. (C 82) 1 1 88.
81 An interesting passage in easyjet Airline, http://eur-lex.europa.eu
/LexUriServ/LexUriServ.do?uri=CELEX:DKEY=429256:EN:NOT (Jul. 4,
when defining a relevant market, and will not second-guess the

Commission on this issue, unless the decision lacks reasoning or is
obviously wrong, and thereby consists in a "manifest error of
assessment."
However, the Commission will not enjoy such a level of discretion
when applying economic theory that is relatively new, where there is
no established history of decisions in which such a theory has been
applied, and which has been subsequently confirmed by the CEI.^^ In
addition, where the analysis of the competitive harm that will be
brought by the transaction is prospective, the Commission will have
to conduct its review "with great care."83 Moreover, the recent
2006), shows the level of deference that is given (even by parties) to market
definitions by the Commission:
At the hearing the [CFI] asked the applicant to clarify its position with
regard to market definition so as to state whether or not it was seeking to
challenge the Commission's definition of the market. The applicant
replied in the negative, explaining that it did not intend to challenge the
merits of the O&D method, but wished to highlight the fact that, in its
view, the Commission ought to have assessed the effect on competition
on other markets, which should have been defined differently.
Id. 1 57.
82 See Airtours, 2002 E.C.R. 11-2585. The CFI confirmed the Commission's
relevant market definition, but reviewed thoroughly, and disagreed with, the
Commission's assessment of the facts for the finding of a collective
dominance in the postmerger scenario.
83 See Case T-210/01, General Electric v. Commission, 2006 O.J. (C 48)
26-27. The CFI stated:
[E]ffective judicial review is all the more necessary when the Commission
carries out a prospective analysis of developments which might occur on
a market as a result of a proposed concentration. As the Court stated in
its judgment in Commission v Tetra Laval, a prospective analysis of the
kind necessary in merger control must be carried out with great care
since it does not entail the examination of past events—for which many
items of evidence are often available to enable their causes to be
understood—or even of current events, but rather a prediction of events
which are more or less likely to occur in future if a decision prohibiting
the planned concentration or laying down the conditions for it is not
adopted (see, to that effect, Tetra Laval v Gommission). A prospective
judgments indicate that the CEI will review closely the quality of the
evidence presented by the Commission to justify its decision, to see
whether the facts objectively support the findings that purport to
make the decision reasonable.
4. EFFECTS OF CH'S JUDGMENT The CEI will not issue a judgment in
substitution of the decision issued by the Commission. Once the
Commission decision is found to be in violation of any of the grounds
for appeal, the CEI will annul the decision, arid it will be for the
Commission to issue another decision in order to comply with Article
233, which requires "[t]he institution . . . whose act has been declared
void . . . to take the necessary measures to comply with the
judgment." In addition, in the merger scenario, the annulment of the
Commission decision that blocked the merger is not necessarily good
news for the parties, since in order to close the transaction they will
still need an approval from the Commission, and the annulment of
the blocking decision does not ensure that approval will be granted.
(The decision may have been annulled on procedural grounds, and
the Commission could reach the same decision once the procedural
defects are corrected.^") Eurthermore, the commercial imperative
underlying the parties' desire for proceeding with the transaction
analysis consisting in an examination of how a concentration might alter

the factors determining the state of competition on a given market, in order
to establish whether it would give rise to a serious impediment to effective
competition, makes it necessary to envisage various chains of cause and
effect with a view to ascertaining which of them are the most likely.
Id. 164 (citations omitted).
« In Case T-310/01, Schneider Electric SA v. Commission, 2002 E.C.R. II-
4071 1 42, the CFI confirmed the Commission's view on the anticompetitive
effects of the merger in France, but found that the Commission's findings as to
the markets in other Member States were not supported by the facts.
However, "manifest errors of assessment" were not in themselves capable of
justifying annulment of the decision in its entirety, since the Commission had
established that the merger would impede competition in France. Id. 1 412.
Nonetheless, it annulled the decision essentially on procedural grounds, due
to the fact that the statement of objections issued by the Commission did not
disclose to the parties the entirety of the Commission's concerns with the
merger, thus preventing the parties from being able to address such concerns
by proposing commitments.
may have long ceased to exist by the time the CEI reaches its
judgment on the merits of the appeal.
In situations in which the Commission prohibits a merger and
later issues a decision under Article 8(4) of the ECMR to restore
conditions of effective competition, in the event the CEI annuls the
prohibition decision, the second divestiture decision will
consequently also be annulled because the latter's "validity is
contingent on that of the decision prohibiting the concentration and
that, accordingly, annulment of [thisl decision completely deprives
the divestiture decision of any legal basis."85 As a result, "the illegaUty
of the prohibition decision thus leads to the illegality of the
divestiture decision," which will be annulled.^* Nonetheless that does
not mean the merger can still go ahead; in such situations the
Commission will first have to issue a clearance decision, and
therefore it will need to restart its whole investigation into the
merger.
The CEI does not have to refer the case back to the Commission in
cases relating to decisions on fines. According to Article 16 of the
ECMR: "The Court of Justice shall have unlimited jurisdiction within
the meaning of Article 12291 of the Treaty to review decisions whereby
the Commission has fixed a fine or periodic penalty payments; it may
cancel, reduce or increase the fine or periodic penalty payments
imposed."87 As a result, the CEI may decide for itself what the
appropriate amount of a fine or penalty, if any, should be.
In cases in which a Commission decision is annulled, the merger
parties may, if they have suffered loss as a result of that decision, seek
to bring proceedings against the EU in order to obtain reparation.
85 Case T-80/02, Tetra Laval v. Gommission, 2002 E.C.R. 11-4519 1 37

(annulment of divestiture decision) and Case T-77/02, Schneider Electric v.
Commission, 2002 E.C.R. 11-4201141 (armulment of divestiture decision).
» Tetra Laval, 2002 E.C.R. 11-4519 1 42 and Schneider, 2002 E.C.R. 11-4201
144.
8'' Under Articles 14 and 15 of the ECMR, fines and periodic penalty
payments may be imposed for failing to provide requested information,
providing incorrect or misleading information, or for failing to comply with
Commission decisions. ECMR, supra note 6, at 15-16.
Article 288 of the EC Treaty provides that "the Community shall, in

accordance with the general principles common to the laws of the
Member States, make good any damage caused by its institutions or
by its servants in the performance of their duties." This is known as
an "action for noncontractual liability."
To bring an action for noncontractual liability, an applicant must
establish that the Commission acted unlawfully in adopting its
decision, that the applicant suffered damage as a result, and that there
is a direct causal link between the Commission's wrongful act and the
damage suffered. The action is subject to a five-year limitation period
that runs from the moment when all the constitutive elements of
liability have been identified by the applicant. In practice, such
actions have rarely been successful, since the European courts have
taken a restrictive approach to the issue of the EU's noncontractual
liability. In the field of competition, there have only been two
successful actions for noncontractual liability.^
In March 2003, MyTravel (formerly Airtours) announced that it
intended "to make a claim to the [CEI] for an award of damages
against the European Commission for the unlawful prohibition of [its]
bid, in 1999, to acquire Eirst Choice."^^ The action is currently pending
before the
88 See Case T-171/99, Corus v. Commission, 2001 E.C.R. 11-2967 and

Case 145/83, Stanley Adams v. Commission, 1985 E.C.R. 3539. The Gorus
case concerned the competition provisions of the Steel and Coal Treaty.
Here, the CEI found that the Commission was liable to pay interest as part
of the reimbursement of a fine imposed on Corus (British Steel at the time)
that was subsequently reduced on appeal by the CEI. In the Stanley Adams
case, the Commission was found liable for a breach of confidentiality that
resulted in the disclosure of the identity of Mr. Adams, a whistleblower
who had provided the Commission with documentary evidence of a
number of abusive anticompetitive practices that implicated his former
employer, Hoffman-La Roche. As a result of this breach, Mr. Adams had
been prosecuted in Switzerland for unlawful disclosure of business
information.
8* Statement at Annual General Meeting, My ravel Group pic (Mar. 20,
2003).
w Case T-212/03, MyTravel Group pic v. Commission (filed June 18, 2003).
376 : T H E ANTITRUST BULLETIN: Vol. 51, NO. 2/Summer 2006
5. TIMING FOR DECISION AND THE "FAST TRACK" EXPEDITED

PROCEDURE An appeal before the CEI is a lengthy process. The
average time for the CEI to reach a judgment is almost two years and
often longer in competition and merger cases, which involve complex
issues of economic analysis. In Airtours v. Commission, heard under
the regular procedure, the judgment was issued almost three years
after the Commission blocked the merger. The significant time span
between the blocking decision and the CEI judgment makes it very
unlikely that the merger could now go ahead even if in the end the
Commission decision has been annulled.
The main reason for the delay is the significant workload of the
CEI. The CEI was itself created to help the ECJ deal with the excessive
workload that built up during the 1980s. However, the intemal Rules
of Procedure of the CEI have also contributed to this delay. In order to
reduce the amount of time needed for a decision, the CEI adopted in
December 2000 certain amendments to its rules of procedure.'^ These
amendments created an expedited procedure,^^ jj, which a greater
emphasis is given to the oral procedure over written pleadings and
defenses. The expedited procedure is aimed at particular types of
appeals, including appeals against merger control decisions. The
parties wishing to have their cases heard under the expedited
procedure must make a separate application to the CEI for that
purpose. The CEI makes its decisions on a case-by-case basis,
evaluating the urgency of the matter and whether in each case it is
appropriate to have a predominantly oral proceeding.
However, even under the expedited procedure the review process
takes several months,'^ which is probably too long for the parties to a
" Amendments to the Rules of the Court of Eirst Instance of the

European Communities, 2000 O.J. (L 322) 4. A consolidated version of the
Rules of Procedure of the Court of Eirst Instance is available at http://europa
.eu.int/eur-lex/en/consleg/pdf/1991/en_1991Q0530_do_001.pdf.
^2 Article 76(a) of Rules of Procedure of the Court of First Instance of the
European Communities.
« Both Case T-310/01, Schneider Electric SA v. Comn:ussion, 2002 E.C.R.
11-4071, and Case T-5/02, Tetra Laval BV v. Commission, 2002 E.C.R. 11-4382,
were tried under the expedited procedure, and in both cases the CEI
judgments were issued less than a year after the appeal was filed.
proposed merger to have to wait. This new procedure is not free from
criticism: "The new 'fast-track' procedure is little better [than the
regular procedure]. . . . [T}his still involves a significant delay, is not
automatically granted and requires significant limitations on the areas
to be investigated by the Court."^'' The previous Competition
Commissioner Mario Monti, however, saw the introduction of the
expedited procedure as a significant step toward the establishment of
effective judicial review:
[T]he introduction by the CFI of a fast-track procedure has had consider-
able success, demonstrating that judicial review can be delivered with
relative speed. The efficiency with which it disposed of the appeals in
two recent merger cases represents real progress. I hope that it will be
possible for appeals in merger cases to be even further accelerated.''
The CFI also identifies another factor as the main reason for the
significant delays in judgments (not only competition related):
excessively long pleadings presented by the applicants. In its Practice
Directions, the CFI states that "[i]n the interests both of the parties
themselves and of the proper administration of justice, pleadings
must concentrate on essential matters and be as brief as possible.
Excessively lengthy pleadings complicate consideration of the case-
file and are a prime cause of delay in the disposal of cases."'* The
Practice Directions then go on to give indications as to what the CFI
considers the appropriate maximum length of pleadings.
« Alan Overd, After the Airtours Appeal, 23(8) E.C.L.R. 377 (2002).
'5 Mario Monti, Europe's merger monitor. THE ECONOMIST, NOV. 9, 2002, at
89-90. A similar view is shared by Temple Lang, who states, in his notes, that
the new procedure "is very important because it creates, for the first time, the
possibility of effective judicial review of Commission merger decisions. This
will make the overall [EC] merger procedures more acceptable to companies.
It will discourage Commission officials from being prejudiced or
unreasonable, and from relying unduly on submissions made by competitors,
or on novel or unsubstantiated theories, e.g., about future market
developments or joint dominance. It will tend to bring the results of [EC]
merger cases more into line with the results in U.S. cases, which are
influenced directly by the need to convince courts." Lang, supra note 27.
* Court of Justice—Court of First Instance Practice Direction, 2002 O.J.
(L 87) 48.
As a result, this places restrictions on the complexity of the

arguments that may be invoked in support of an appeal and
necessarily limits the degree to which the merger parties can appeal a
merger decision. More often than not, the parties will have to
consider limiting the grounds of appeal to their strongest arguments.
For example in expedited proceedings against a decision to block a
merger, the parties may need to decide to limit their grounds of
appeal to the substantive assessment made by the Commission that
led to the prohibition, or depending on the circumstances of the case,
the challenge may instead focus on the Commission's refusal to
recognize that the commitments offered were sufficient to alleviate
the competition concems that it has identified.
Contrary to the normal procedure, which essentially involves the
exchange of written pleadings, the expedited procedure is largely
oral. Therefore, the oral hearing becomes particularly significant to
the outcome of a case heard under the expedited procedure. Since the
expedited procedure generally involves only one exchange of
pleadings (consisting of the application and the defense), the oral
hearing is of much more importance than in the normal procedure. In
the normal procedure, the written exchange provides each party with
the opportunity to challenge the other's arguments and evidence and
reveal any underlying inconsistencies in its contentions (which makes
the oral hearing a less significant step in the proceedings). In the
expedited procedure, this role is essentially played by the oral
hearing since the exchange of pleadings will generally be limited to
the applicant's reply and the defendant's rejoinder. The importance of
the oral hearing is made abundantly clear by the extent to which the
CFI refers to arguments made and evidence adduced by the parties
during the oral hearing in Tetra Laval v. Commissions'^ and, to a lesser
extent, also in Schneider v. Commission,^^ both of which were heard
under the expedited procedure.
Though the recent adoption of the expedited procedure remains to

prove its worth, it does not detract from the fact that there is still plenty
of scope for further enhancement to the CFI's rules of procedure,
•^7 Tetra Laval, 2002 E.C.R. 11-4519.

98 Schneider, 2002 E.C.R. 11-4201.
particularly in light of the U.K. Competition Appeal Tribunal's (CAT)

rules of procedure, which are themselves modelled on the CFI rules.^
We suggest that the appeals process—under both expedited and
normal procedures—could still be further fine-tuned. For example,
under the normal procedure, particular procedural changes that could
be made to the CFI rules of procedure include allowing the CFI to
make orders by consent and to accept payments into court as security
for undertakings that might be given in the course of proceedings or as
a condition for allowing the suspension of a Commission decision
ordering interim measures. The CAT rules specifically allow for such
procedures, which were used in the Napp Pharmaceuticals case'" to
help keep proceedings within a reasonable timeframe. The adoption of
such procedures would surely be one way of further accelerating
competition appeals proceedings before the European Courts.
IV. CONCLUSION
One of the main areas of concern that was identified in the
majority of responses to the Commission's Green Paper on reform of
the ECMR,ioi which preceded adoption of the new ECMR in 2004,
was the need to reinforce the procedural safeguards contained within
the merger review process. The Commission's summary of responses
recounts the concern expressed by respondents who felt that "the
availability of effective judicial review is illusory, on account of the
lengthy delays before appeals can be heard and judgements [sic]
rendered, as well as because of the existence of what is perceived by
some to be inadequate standard of review."'''^
^ The CAT has jurisdiction to hear appeals against decisions of the

Office of Fair Trading and the sectoral regulators issued on the basis of the
Competition Act, 1998, c. 41, and the Enterprise Act, 2002, c. 40.
"» Napp Pharmaceutical Holdings Ltd. & Subscribers v. Director
Ceneral of Eair Trading, 2001 Comp. A.R.I.
loi Creen Paper on the Review of Council Regulation (EEC) 4064/89 of
11 December 2001, COM(2001) 745/6 final.
lo^ Creen Paper on the Review of Council Regulation (EEC) 4064/89—
Summary of Replies Received fj 192, 216-219, available at http://europa
.eu.int/comm/competi t i o n / m e r g e r s / r e view/comments/summary
_publication.pdf.
A small number of Green Paper respondents suggested that a

complete overhaul of the appeal system was needed to create a "U.S.-
style prosecutorial regime," with the Commission having to put its
case before a new court that is independent of the Commission.'o^ The
court would then make a decision as to whether to clear or block a
merger. However, this radical suggestion is not possible within the
current institutional framework and would necessarily require a
change to the EC Treaty, and there seems to be little, if any, political
appetite for such an overhaul at present.
An alternative suggestion currently being considered would not
require EC Treaty change and would allow the Commission to retain
its current responsibilities while attempting to create a faster appeals
process. This alternative consists of the creation of a "judicial panel"
within the CFI itself that would specialize in hearing appeals brought
against competition and merger decisions. Further appeals would
then be possible to the CFI on points of law or fact. In view of the
decentralization of EC competition law, the CFI would also be given
the power to issue preliminary references on competition issues
under Article 234. This proposal would not require amendment to the
EC Treaty, because now that the Treaty of Nice is in force, the
revisions which it has made to the EC Treaty rules on the European
Courts empowers the Council to set up such judicial panels pursuant
to new Article USa^"* and gives jurisdiction to the CFI to issue
preliminary rulings "in specific areas laid down by the Statute" of the
Court of Justice pursuant to new Article 225(*)(3).i''5 However, the
substance of this proposal has yet to be the subject of an
implementing decision by the Council under Article 225a and
relevant changes to the CFI's Rules of Procedure.
In the meantime, however, the long-standing criticism levelled

against the CFI regarding the shallow extent to which it will probe the
Commission's analysis of a merger seems to have been dampened
somewhat by the recent of judgments quashing the Commission's
103 Id. n 193, 214-215.

iM ECTreaty, si(pranote5, atl24.
'"s Id.
merger decisions. The CFI's unparalleled rebuke to the Commission

in the merger field, and the recent ECJ judgment in the Tetra Laval
case, confirm a tightening up of the level of scrutiny under which the
Commission is being placed by the CFI in antitrust cases, as
witnessed earlier in the field of Article 81 appeals, such as the Bayer v.
Commission case.'"* Confirmation, it would seem then, that the
European courts will more and more play a relevant role in the
merger review area within the EU.
Case T-41 /96, Bayer AG v. Commission, 2000 E.C.R. 11-3383.

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THE ANTITRUST BULLETIN: Vo/. 51, No.

2/SM»imer 2006 : 339

Judicial review of merger control decisions

BY FRANCISCO TODOROV" AND ANTHONY VALCKE***

* Originally published, in part, under the title Procedural Aspects of Judi-

significantly more interventionist in reviewing the Commission's

II. INSTITUTIONAL STRUCTURE OF COMPETITION

' Case T-342/99, Airtours v. Commission, 2002 E.C.R. 11-2585; Case

B. The European Commission

3 P.J.G. KAPTEYN & P. VERLOREN VAN THEMAAT, INTRODUCTION TO THE LAW

or take instructions from any governnient or other body."'' The

" Id. at 195.

C. The European Court of Justice and the

The ECJ is composed of 25 judges and 8 Advocates-General, who

8 KAPTEYN, & VAN THEMAAT, supra note 3, at 258.

III. JUDICIAL REVIEW OF EU MERGER DECISIONS

B. Judicial review of merger decisions

15 That is to say, decisions issued by the Commission under the new EC

the interests of [the] applicant by bringing about a distinct change in

In particular, where a merger is cleared without conditions, the

There is an additional argument to suggest that the parties to a

2" Articles 6 and 8 of the ECMR speak of "commitments [the parties]

applicant parties offered certain commitments. Those commitments were

subject to commitments may challenge the Commission's insistence

^ CHRISTOPHER BELLAMY & GRAHAM CHILD, EUROPEAN COMMUNITY LAW OF

an undertaking to the Commission, under protest, and if carrying out the

^ John Temple Lang, Appealing Against Commission Decisions in

This is clear from the judgment in the Lagardere/Canal+ case.^^ In

restrictions directly related and necessary to the implementation of the

The Commission's jurisdiction over a case could also be

whole or in part, back to the requesting national competition

35 An action was brought by Koninklijke BAM against the Commission's

^ Case T-342/99, Airtours v. Con:imission, 2002 E.C.R. 11-2585; Case

to block a transaction and also decisions to clear a transaction with

that measure. Only the existence of specific circumstances may enable a

"•* Joined Cases 10 and 18/68, Societa 'Eridania' Zuccherifici Nazionali

been correspondingly affected in a manner which distinguishes it indi-

In Air France's parallel action against the Commission's decision

"directly and individually"5i concemed by the merger decision they

whether in whole or in part—to national competition authorities

5^ See, e.g., Philips's appeal against the Commission's decision to refer

56 Case T-96/92, Comite d'Entreprise de la Societe Generate des Grandes

57 Council Directive 2001/23,2001 O.J. (L 82) 16 (previously Directive

5' Id. n 34-36.

fulfillment of connnrutments. The Petrolessence case^ concemed an appeal

« Case T-342/00, Petrolessence & SG2R v. Commission, 2003 E.C.R. 11-

[T]he fact that the applicant cannot be considered to be a competitor, or

However, ARD lost the appeal on the merits.

a) Lack of Competence If the Commission acts outside the powers

« Case T-158/00, Arbeitsgemeinschaft der offentlich-rechtlichen

b) Procedural Defects A merger decision can also be annulled on

« Case T-102/96, Gencor v. Commission, 1999 E.C.R. 11-753 Ti 78-88.

of the procedural defect would have led the Commission to adopt a

67 In Case T-209/01, Honeywell v. Commission, 2006 O.J. (C 48) 26, the

the act is well-founded or, on the contrary, whether it contains

ECMR and composed of representatives of the Member States, which

72 Case T-290/94, Kaysersberg v. Commission, 1997 E.C.R. 11-2137 f 88,

The merger parties' procedural rights also require that the

'" Case T-310/01, Schneider Electric SA v. Commission, 2002 E.C.R. II-

In fact, however, a judgment of the CFI cancelling a previous

'^ If a Commission decision is based on several grounds, then to be suc-

The scope of the Commission's discretion in merger cases, and the

The degree of discretion granted to the Commission varies depending