United Brands Company v Commission of the European Communities
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| United Brands Company v Commission of the European Communities | |
|---|---|
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| Court | European Court of Justice |
| Keywords | |
| Competition; Abuse of a Dominant Position | |
United Brands v Commission (1976) case 27/76 is an EU competition legal case concerning abuse of a dominant position in a relevant product market. The case involved the infamous "green banana clause". It is one of the most famous cases in European competition law.
Background
European Union competition law seeks to ban cartels, collusion and other anti-competitive practices,[1] and to ban abuse of dominant market positions.[2] The primary aim is to prevent any distortion of the single market, rather than to provide individual redress. The particular objectives are to establish:
open, non-partitioned market; effective competition; no over-concentration, fairness, international competitiveness.[3]
Facts
United Brands Company (UBC) was the main supplier of bananas in Europe, using mainly the Chiquita brand. UBC forbade its distributors/ripeners to sell bananas that UBC did not supply. Also, UBC fixed pricing each week; charging a higher price in different Member States, and imposed unfair prices upon customers in Belgo-Luxembourg Economic Union, Denmark, The Netherlands and Germany.[4]
The Commission viewed United Brands' action as a breach of Article 86 of the Treaty of Rome (now Art 102 of the TFEU).[5] Article 86 prohibits "abuse of a dominant position" of a relevant market. The case was referred for a Preliminary Ruling to the European Court of Justice under Article 177 (now Art 267).
Judgment
Agreeing with the Commission, the ECJ held that United Brands' behaviour was unlawful:
- The ECJ rejected UBC's claim that the product market was the "fresh-fruit market as a whole". Instead, because of the notion of cross elasticity of demand and product characteristics, the product market was defined as the banana market.
- UBC had about 45% of the EU banana market, and 45% was deemed to amount to a "dominant position".[6]
- Since the "green banana clause" effectively prevented any competing logistics firms from carrying Chiquita bananas, it was anti-competitive and in breach of Art 86.
See also
References
- ^ Art 101 TFEU
- ^ Art 102 TFEU
- ^ European Union Law: Text Cases & Materials - Tillotson, John
- ^ Case report [[1]]
- ^ The relevant articles were originally numbered 85 & 86, then 81 & 82, and finally 101 & 102
- ^ M.A.G. van Meerhaeghe, Protection of competition in Belgium, Economia delle Scelte Pubbliche (Journal of Public Finance and Public Choice), Vol. VIII, 1990-2/3, p. 100.
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