The General Court of the European Union has reversed a decision made by the European Commission (EC) which, in 2013, blocked the purchase of TNT Express by UPS. This decision could leave the EC open to a legal challenge by UPS over damages. TNT Express was later bought by FedEx in 2016 in a deal worth EUR4.4billion.
On January 30, 2013, the European Commission prohibited the proposed acquisition of the Dutch global logistics company TNT Express by the US-owned UPS, finding that the move would have restricted competition within 15 countries of the European Union.
Then-Commission Vice President in charge of competition policy, Joaquín Almunia, said at the time that the merger would have affected small businesses as it would have reduced choice and led to price increases. "We worked hard with UPS on possible remedies until very late in the procedure,: he said. "But what they offered was simply not enough to address the serious competition problems we identified."
The Commission further found that benefits from the combination of UPS and TNT's air networks were not significant enough to counter the argument against the merger.
However, the European General Court this week found that the Commission had infringed on UPS' rights of defence by relying on an econometric analysis which differed from the one that had been discussed during the proceedings. The changes which the Commission made to the analysis were, the Court upheld, non-negligible and the Commission was required to provide that model to UPS for argument.
Reuters reports that UPS is pleased with the finding. "While the decision in UPS's favour makes a number of points, the most significant of this decision is its impact in helping to preserve a competitive environment in Europe by clarifying the procedure and relevant criteria for merger approval," UPS said.
