Defying the odds: When companies win against the European Commission

The European Commission is a stronghold in the world of antitrust enforcement. Facing a Commission investigation can sometimes feel overwhelming to companies, and the Commission’s decisions can have far-reaching consequences for businesses of all sizes. However, recent cases remind us that the Commission does not always have the last word.

While at least some stakeholders might have a desire to grant broader powers to antitrust regulators and limit the “nuisance” of judicial review (see here), so far, the European Commission’s antitrust decisions can still be appealed to the EU’s General Court and, in the second instance, to the EU’s Court of Justice. Such appeals can seem like an uphill battle, but a number of recent decisions have shown that this battle can be worth it, and that judicial review is important.

Illumina: Challenging jurisdiction

What a saga, and what an ending: In what makes for an antitrust blockbuster, the Commission prohibited Illumina’s acquisition of Grail. The tricky thing was that the transaction did not meet merger control thresholds anywhere in the EU, and was only reviewed by the Commission because national regulators – which themselves had no jurisdiction to review the transaction – referred the case to the Commission under a (newly adopted) referral policy under Art. 22 EUMR. The Commission even fined Illumina for closing the transaction without clearance.

Illumina fought the Commission tooth and nail, and ultimately won: Last month, the Court of Justice overturned the Commission’s prohibition decision, and in turn put an end to the still young policy of referring otherwise non-notifiable transactions to the Commission (here is how things still looked in front of the General Court). The decision then sparked an ongoing debate of whether the Commission and/or national regulators need more powers to call in transactions for review pro-actively, and whether non-notifiable transactions should be assessed under abuse of dominance rules more often.

French supermarkets: Ensuring due process

Last year, the Court of Justice reminded us that due process has to be followed also in the process leading up to dawn raids: Before opening a formal investigation and conducting dawn raids at the premises of a number of French retailers, the Commission conducted interviews with suppliers to collect information on potential antitrust infringements. Those interviews were not recorded, apparently because they were conducted prior to the formal opening of an investigation.

The affected companies appealed, and the Court of Justice held that the dawn raids were invalid, as interviews conducted to collect information on the subject matter of an investigation have to be recorded in some form (also see here).

Intel and Google: Overturning billions of fines

In two unrelated cases, Intel and Google respectively managed to overturn billion-Euro fining decisions: In a saga of its own, in January 2022 Intel succeeded to overturn a fine of EUR 1.06 billion for what the Commission had found were abusive rebates. The case went up to the Court of Justice and then back to the General Court, which found that the Commission’s analysis was incomplete and did not meet requisite legal standard (more on that can be found here).

Even more recently, namely only about two weeks ago, Google managed to have a fine of EUR 1.5 billion for an alleged abuse of dominance with regard to its advertising platform AdSense overturned. Even though the decision could still be appealed by the Commission, in the General Court’s view, the Commission failed to take into consideration all the relevant circumstances in its assessment of the duration of the alleged infringements.

Lessons for companies

The decisions offer valuable lessons for companies facing antitrust scrutiny:

• Understand your rights: Be aware of your rights under antitrust law and the avenues available for challenging decisions.
  
• Gather evidence: Collect and preserve evidence that supports your case and can be used to challenge a regulator’s findings and/or process.
  
• Be persistent: Appeals can be a lengthy and complex process, and it is important to remain persistent and fight for your rights.
  
• Leverage the big picture: While cases are (mostly) decided on the merits, neither regulators nor courts operate in a vacuum. Be aware of broader developments and trends, and engage with stakeholders were helpful.

Conclusion

Antitrust regulators like the Commission are a powerful force, but they are not infallible. By understanding their rights and pursuing legal remedies, companies can challenge unfair decisions and protect their interests. The decisions demonstrate that even the most formidable opponents can be beaten (see here for an overview of similar cases at a national level). However, be aware that this does of course not apply to all cases: In the past few years, the Commission has also won a number of high-profile disputes before the EU courts.

Overall, regulators losing (and winning) cases is not a bad sign, but rather an indication and reminder (!) that judicial review works and is important. Some will even argue that a regulator should lose cases from time to time, because only that shows that the regulator is bold and is trying to explore the boundaries of its powers.

Photo by TANMAY GHOSH.