Compass Lexecon has been advising UPS, the world’s largest package delivery company, during the European Commission (”EC”) investigation of its proposed acquisition of TNT.
Compass Lexecon experts Enrique Andreu, Jorge Padilla and Nadine Watson developed and presented an econometric price-concentration analysis in response to the EC’s Statement of Objections. The Commission took account of this contribution in its final decision and reduced the scope of its competition concerns, from 29 to 15 countries. Nonetheless, in 2013 it prohibited the proposed transaction.
During the subsequent appeal process before the General Court of the European Union, Compass Lexecon continued to assist UPS by providing both written and oral testimony. On 7 March 2017, the General Court annulled the EC’s 2013 decision to prohibit UPS’ proposed acquisition of TNT.
The Court ruled that the EC’s prohibition of the proposed transaction was based in part on an econometric model significantly different from that which had been the subject of an exchange of views and arguments during the administrative procedure. The Court concludes that the EC was required to communicate the final econometric analysis model to UPS before adopting the contested Decision, since UPS “was already able, during the administrative procedure, to have a significant influence on the development of the econometric model proposed by the EC, since it raised technical problems to which it provided solutions, as the EC expressly acknowledges”. By failing to do so, the EC infringed UPS’ rights of defence.