EU Commission takes merger powers fight to court

The European Commission goes to the EU's highest court next week to halt what it sees as the poaching by EU judges of its powers to halt mergers that damage competition.
The Commission, acting after the third of three stinging defeats in 2002, is challenging a judgement from the European Court of First Instance (CFI) which overturned its ban on a take-over by Tetra Laval of French bottle-maker Sidel.
The deal itself has gone through, but EU Competition Commissioner Mario Monti is fighting what he sees as the CFI's undermining of the ability of Brussels to stop anti-competitive merger deals.
"The Commission believes that the (lower court) has imposed a disproportionate standard of proof for merger prohibition decisions," the EU executive said when it announced the appeal in late 2002.
It has appealed to the EU's top court, the European Court of Justice, and the hearing in the case will be on Tuesday.
It will involve lawyers for the Commission and Tetra, but the real issue at stake is the court's reasoning in the case.
The court said the Commission was speculating about Tetra Laval's intentions without offering any real proof.
The Commission has said the lower court's job was to review the decision "for clear errors of fact or reasoning and not to substitute its view of the case for that of the Commission".
From the company's perspective, the right of firms to merge without undue interference is at issue.
Most mergers are routinely approved by the Commission, but a few run into problems because they would give one company a huge market share permitting it to raise prices.
But very few companies present issues like those raised in the Tetra Laval case, where the arguments are more complex than straight market share.
Privately-owned Tetra Laval is well known for its cardboard cartons for drinks. Sidel makes machines that fashion heated lumps of plastic into clear PET plastic bottles.
The Commission stopped the deal as it feared Tetra would be able to use its power in the market for cardboard cartons to convince companies to buy more Sidel products.
In previous years Monti had seemed on a roll, launching an antitrust probe into Microsoft and rejecting the GE/Honeywell mega merger, even though US authorities had backed it.