Economic Evidence In Merger Review: EU's Highest Court Clarifies Rights Of Defense

Author:Ms Charlotte Breuvart, Eric Barbier de la Serre, Serge Clerckx and Henry de la Barre d'Erquelinnes
Profession:Jones Day

In Short

The Development: The European Court of Justice ("ECJ") ruled that the European Commission ("Commission") violated UPS's rights of defense when it failed to provide UPS with the final economic model used in its decision to block UPS's proposed acquisition of TNT in 2013.

The Result: The Commission must provide merging parties with all the factors on which it bases a decision to block a transaction, including the key analytical steps and calculations in any economic models.

Looking Ahead: The ruling will lead to increased Commission and National Competition Authority ("NCA") transparency regarding economic evidence and provide more opportunities for merging parties to engage with the Commission and NCAs about the competitive effects of a transaction.


In 2012, UPS notified the proposed €5.2 billion acquisition of TNT. Following an in-depth review, the Commission found that the merger would reduce competition in the market for international intra-EEA deliveries of small packages in 15 Member States. The Commission blocked the acquisition in June 2013, and the parties abandoned the transaction. Fedex, a UPS rival, subsequently acquired TNT in 2016.

In 2017, the General Court of the European Union ("GC") annulled the Commission's decision, holding that the Commission breached UPS's rights of defense by relying on an economic model that had not been shared in full with the merging parties. The Commission challenged the judgment before the ECJ, which, in January 2019, rejected the appeal and confirmed annulment of the Commission's prohibition decision.

This ruling is one of the rare instances in which an EU court overturned a Commission merger prohibition decision (the last such judgments were in 2002).

The ECJ Ruling

The EU Charter of Fundamental Rights establishes rights of defense, which include the right to access files and the right to be heard before the European Union takes an adverse action. In merger reviews, the EU Merger Regulation and the Merger Implementing Regulation provide that the Commission must allow notifying parties the opportunity to submit their views on the accuracy and relevance of all the factors on which the Commission bases its decision. When the Commission intends to base its decision, at least in part, on an econometric model, the Commission must share the model with the merging parties and allow them an opportunity to respond.

In this case, although the parties had responded to an earlier version...

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