Select Committee on European Union Fifteenth Report

FOREWORD—what this Report is about

Large cross-border mergers have to be cleared in advance with the EC Commission to ensure that they do not impede competition in the Union. The vast majority are cleared fairly speedily. Where the Commission prohibits a merger that decision can be challenged in the Court of First Instance (CFI). And third parties can similarly challenge a decision by the Commission to clear a merger.

The procedure in the CFI may take several months (the fastest to date being seven months) even if the "fast-track" is used. In the meantime the merging parties are faced with uncertainty and the merger may sometimes be abandoned.

This position, both European industry and their advisers agree, is highly unsatisfactory. Business opportunities, with potential benefits for competition and the competitiveness of EU industry and commerce, might be lost. Moreover, there is a lack of accountability and of controls to maintain appropriate standards if an aggrieved party is, as a result of delay, effectively barred from challenging an allegedly lawful decision.

In June 2006 the CBI published a Brief setting out a proposal for the creation of a European Competition Court (by way of a judicial panel under Article 225a TEC) with specialist judges and tailor-made procedures. This document formed the basis of our inquiry, which stimulated a wide-ranging debate. A wide variety of other options have also been presented by interested parties. Some suggestions were, in legislative terms, modest (such as establishing a specialist competition chamber within the CFI). Others were more ambitious (transferring other business away from the CFI) or quite radical (transferring decision-taking away from the Commission). Most of the options raised practical and political considerations.

We conclude that a new Competition Court is not the way forward, at least at the present time. We doubt whether a new court would in the long term achieve any great savings in time. It would be faced with the same complex litigation that currently occupies the CFI, and it would increase the number of levels of appeal.

Far better, we believe, would be to look at the scope for:

(i) improving on the present procedure, in particular by encouraging firmer case management by the judges and stricter deadlines;

(ii) reducing the amount of business of the CFI, principally by transferring trade mark cases to a judicial panel, though this is not an option free of difficulty; and

(iii) seeing whether changes in the Commission's handling of cartel cases can in turn reduce the number and scope of challenges in such cases, removing a substantial workload from the CFI.

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