Call for freeze on Commission ‘meddling’

Date: 08/06/2000

By Peter Chapman

THE European Commission's promise to hand more of its powers in competition cases to national courts could prove to be an empty gesture, according to industry lawyers.

The warning comes amid growing concern over the tangled legal web surrounding ongoing cases in the European courts over ice cream giant Unilever's offer of free refrigerators to shops in Ireland on condition that they do not carry the products of fierce rivals such as Mars.

A lower Irish court initially ruled that the practice was not an abuse of Unilever's dominant position in the market, but the country's supreme court referred the case to the European Court of Justice after Mars appealed.

Before the referral was made, however, the Commission short-circuited the system by issuing its own ruling, prompted by a complaint from Mars, insisting that Unilever was at fault and was forcing other ice cream products out of the market - especially in shops which did not have room for more than one fridge.

As a result, the European courts are currently hearing two cases on the same issue - a referral from the Irish court to the ECJ and Unilever's appeal against the Commission's ruling in the European Court of First Instance.

Competition chief Mario Monti is expected to unveil concrete proposals in September to give national courts a greater role in routine competition cases, freeing up more Commission resources to fight 'hard-core' cartels and price-fixing cases, in line with the EU executive's 1999 White Paper on competition policy reform.

But EU food and drinks industry lawyers argue that despite this, the legal confusion surrounding the Unilever case could become the rule rather than the exception, unless the Commission makes a formal promise not to give in to temptation by intervening in cases.

This, they say, is because aggrieved companies will still complain to the EU executive if they think that national courts will not provide the desired result. They insist the Commission should not interfere once national courts have started the legal ball rolling, although it should be allowed to appear in court to give its opinion on cases.

"We may end up with the situation where the legal authority is vested in Brussels. In the long term that will be a loss for Europe because people do not have the faith in bureaucrats that they have in the judicial process," said a Brussels-based lawyer for UK drinks firm Chris Scott Wilson.

However, European business lobby group UNICE is urging Monti and his officials to retain a hands-on role, issuing their own rulings in cases where they fear the national courts may have made, or be about to make, the wrong decision. "If it is necessary for the Commission to intervene for the coherence of European law, that is good," said UNICE's competition expert Erik Berggren.