Small firms threaten legal action over MOL

Date: 04/11/1999

By Renée Cordes

EUROPE'S main small business lobby group is threatening legal action against the European Commission for allegedly mishandling a competition complaint filed by one of its members.

UEAPME is considering taking the case to court despite a recent ruling from the EU Ombudsman Jacob Söderman that the Commission was not guilty of maladministration in its handling of the complaint lodged by the now-defunct kitchen utensils maker Microwave Ovenware Limited (MOL).

The company argued that the Commission failed to follow up properly on its claim that a larger Norwegian rival had used unfair pricing tactics to undercut its products and ultimately drive it out of business.

UEAPME, which had requested an investigation into the case by the Ombudsman, now plans to ask the Commission for a formal justification of the way the case was handled. Depending on the institution's response, it will then decide whether to pursue legal action against the Commission in the European Court of First Instance.

"Clearly, European small and medium enterprises are treated in an inferior way to big business when it comes to complaints on competition law abuses," said UEAPME spokesman Garry Parker. "In this case, all the evidence points to a complete misunderstanding by the European Commission of the market at the time."

Parker added that the Ombudsman's decision in favour of the Commission could set a dangerous precedent for the way small and medium-sized businesses are treated by EU regulatory authorities.

The row centres on a complaint lodged by former MOL boss Paul Gregory with UK competition authorities about rival, Dynopack. The case was later referred to competition officials in Brussels.

After an investigation, the Commission ruled there was no evidence of any breach of EU competition law and informed MOL in 1994 that the case had been closed.

Commission officials said it was difficult to justify pursuing the complaint because Dynopack was based in a country outside the Union and because MOL had ceased trading after the complaint was lodged. They argued that they were under no obligation to pursue complaints about allegedly unfair business practices which had since ceased.

But Gregory says he told officials from the outset that MOL was no longer in business and that, initially, they decided to pursue the case anyway. He also claims that the Commission originally led him to believe that there could be grounds for complaint, even though Dynopack was a Norwegian company, and says his repeated efforts to get information from officials met with little success.

Gregory argues that the Commission handled his case sloppily, accepted "false evidence"from Dynopack and failed to inform him of all the case's details.

Europe's main small business lobby group is threatening legal action against the European Commission for allegedly mishandling a competition complaint filed by one of its members.