Calls For European Court of competition

The Confederation of British Industry has called for the appeals process against European Commission decisions on mergers and takeovers to be speeded up. The CBI, which is the UK's primary business lobby group, has circulated a paper to its members calling for the European Union to have a separate competition court to deal with such cases.

In the paper, the CBI describes mergers and acquisitions as "essential for the restructuring of EU industries and the reallocation of resources", and argues that "if there is a fundamental flaw in the mechanism this can only damage the effectiveness of competition and EU competitiveness". It cites the UK system as a model, where appeals have been significantly faster since the establishment of the Competition Appeal Tribunal.


Under the current European system, appeals are dealt with by the European Court of First Instance (CFI), which is part of the European Court of Justice. The CFI typically takes between six and nine months to review so-called "fast-track" appeals, and up to two years for normal cases. Companies who appeal face a prolonged period of uncertainty, which, as in the case of the attempted merger between Airtours and First Choice Holidays in 2000, can sometimes lead to the abandonment of a deal before a decision is reached by the court.


The proposed specialist court would function as a subsidiary of the CFI, and would aim to provide a decision within six months for the majority of cases. The CBI claims that this timescale would be achievable by using specialist judges and by eliminating the need to translate key documents, an issue that has become more significant with the ever-increasing number of member states.


The proposals have sparked mixed reactions, with some competition lawyers expressing scepticism that the complex issues and high degree of factual data to consider could actually be reviewed quickly. Others emphasise that it would be procedural changes, rather than simply the establishment of a new court, that would determine whether the process could actually be sped up, while also conceding that a separate court would make it easier to implement competition-specific changes.


A parliamentary enquiry into the issue is underway in Westminster, but in Europe neither the European Commission nor the European Court of Justice have indicated any support for the proposals so far. The EC has indicated that its preferred approach would be to delegate other issues such as trademarks or personnel to another court, freeing up the existing Court of First Instance to concentrate on competition. In addition, while creating another court would be comparatively easy for the Commission, reforms that address the procedures in place, such as those put forward by the CBI, would require the approval of all member states and are therefore considered unlikely to be passed anytime soon.

Share this article

Latest Businesses for Sale

View more businesses for sale