Thursday, August 09, 2007

A minor hiccup

The EU commission faces an uphill battle to overturn a ruling from the EU's second-highest court that awarded Schneider Electric compensatory damages following the blocking of its merger with Legrand SA more than five years ago.

This is Alec Burnside, an antitrust lawyer and partner at Linklaters' Brussels office, speaking to Thomson Financial News, remarking on a story that emerged in July, when Scheider was setting out to claim an eye-watering €1.6 billion from the commission for getting it wrong, making "egregious errors" when it illegally blocked the group bid for a merger.

Burnside's comment marked the start, yesterday of the commission's appeal hearing against the ECJ ruling that it should pay compensation. The estimate now is that the electrical firm stands only to gain a maximum of €400 million. Nevertheless, that would still qualify as the largest award ever imposed by the EU courts on the commission.

On the other hand, Burnside thinks it could "well be less" as the commission has already won on the most important aspect of the case - that they cannot be held liable for making a faulty economic assessment, on which action was originally taken.

Even then, if the larger sum has to be paid, it is "not huge" compared with the burgeoning income the EU is imposing as cartel fines. It would be interesting to know quite how much the commission is pulling in, as the sums must be substantial by now, especially if a tidy sum like €400 million is, in essence, only regarded as a minor hiccup.


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