European Court of First Instance: no damages granted after annulment of the Commission’s decision to interdict acquistion of First Choice by MyTravel

On 29 April 1999, the United Kingdom travel company Airtours (now renamed into MyTravel Group) announced its intention to acquire the whole of the issued share capital of First Choice, one of its competitors in the United Kingdom, on the stock market. The Commission declared the merger incompatible with the common market on the ground that it would have led to a collective dominant position on the United Kingdom short-haul foreign package holiday market.Airtours brought proceedings before the Court of First Instance which by judgment of 6 June 2002 annulled the decision, holding that the Commission had not shown to the requisite degree that negative effects on competition would arise by virtue of the merger.Following that judgment, MyTravel Group brought an action before the Court of First Instance claiming damages for the loss it claimed to have suffered by reason of the unlawfulness vitiating the review procedure undertaken by the Commission of the compatibility of the proposed acquisition of the applicant’s competitor with the common market.The Court of First Instance held, that for the non-contractual liability of the Community to arise there must be unlawful conduct by its institutions amounting to a manifest and grave disregard for the limits on their discretion. the complexity of the situations to be regulated in the control of mergers, the difficulties of application connected with the time constraints imposed on the administration in that regard and the margin of discretion available to the Commission must be taken into account in analysing whether a sufficiently serious breach on the Commission’s part may have arisen.Having regard to those considerations, the Court of First Instance rules that the Commission did not commit a sufficiently serious infringement of a rule of law in analysing the Airtours/First Choice merger in light of the criteria relating to the creation of a collective dominant position.Source: Court of First Instance press release>>.

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