Companies will be allowed to challenge EU regulators' vetoes of their mergers without having to scrap their deals, under radical proposals being planned by the European Commission.
The move comes after the Commission yesterday suffered another humiliating court defeat - the second in a week - over its decision to block the merger between the packaging groups Tetra Laval and Sidel.
Mr Mario Monti, Competition Commissioner, looks set to propose the creation of a separate competition court, or a competition chamber inside the European Court of Justice, to vet Brussels's decisions in months rather than years.
The radical measure is a sign of the crisis in European competition policy following three recent damning rulings by Europe's second-highest court to quash the Commission's merger vetoes.
The rulings have damaged the credibility of Mr Monti and the European Commission at a time when the Brussels authorities are under attack on economic policy and are in danger of being sidelined in the debate on a future EU constitution.
The new competition system would fall short of a complete change to the US model, which requires regulators to go to court every time they want to block a merger.
However, a separate court would limit the European Commission's sweeping powers on mergers by subjecting the Brussels authorities to tough and quick scrutiny by the courts.
It would also allow companies to keep deals alive while challenging the Commission's decisions, countering the widespread criticism that the Brussels authorities are both "judge and jury".
At present, most mergers are killed off by a Brussels veto because the Court of First Instance can take up to three years to rule on a deal.
The court introduced a fast-track procedure last year, which was used in this week's rulings. As a result, the Swiss-Swedish group Tetra can now proceed with the €1.7 billion takeover of its French rival, Sidel.
However, lack of resources means fast-track can be used in only a few cases every year.
Mr Monti said yesterday he had discussed the creation of a separate competition court with the Luxembourg-based court.
"We have discussed how it would be possible to make more use of the fast track and if possible to make it an even faster track," he said.
"We have started exploring the possibility of a specialised chamber for competition. . . and also the possibility of a judicial panel."
Under the recently ratified Treaty of Nice, the Commission has the power to propose such measures to national governments, which have to take the final decision and decide how to fund the new body.
- (Financial Times Service)
