COLOGNE BUSINESS SCHOOL (CBS)
United Brands Company v. Commission of the European Communities Case 27/76
Coursework for EU Law and Institutions Winter Semester 2013 Lecturer: Dr. Anke Steinhoff Tobias Wilms BA International Business
Table of contents
Introduction 1. 1.1 1.2 2. 2.1 2.1.1 2.2 2.2.1 2.2.2 3. F The Existence of a dominant market position The relevant market UBC´s position on the relevant market Abuse of the dominant position Behavior vis-à-vis the ripeners The clause prohibiting the resale of bananas while still green Price policy Discriminatory prices Unfair Prices urther Submissions
4. 5. 6.
Relevance of Case 27/76 Reference List Affidavit
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In this regard, the Commission imposed a fine of one million units account for on United Brands Company, because of the infringement of Article 86. Furthermore the UBC was told to bring to an end without delay the infringements of this article which were accrued: a) by requiring its distributors and ripeners to refrain from reselling bananas while still green. b) by charging different trade parties in the member states dissimilar prices for equivalent bananas of the brand „chiquita“. c) by imposing unfair prices for the „chiquita“ bananas. d) by rejecting deliveries to the corporation Th. Oelsen, Copenhagen, Denmark. Case 27/76 The UBC an its subsidiary UBCBV claimed against the Commissions decisions at the European Court of Justice with the purpose of the decisions annulment, the payment of
compensation for immaterial damages and, as alternative, the annihilition or reductio of the fine. The European Court of Justice made its judgement in this case on 14 February 1978 and agreed in its Judgement with the European Commission in all specifications accept of one. Article 1 c of Commission Decision was annuled and the fine imposed on UBC and UBCBV was reduced to the amount of 850 000 units of account. The rest of UBC´s applications were dismissed and each party had to pay its own costs of proceedings. Relevance of the Case 27/76 The case United Brands Company v. Commission of the European Communites was one of the first cases of this type and it had important effects on future jurisdictions. Vague expressed Articles in the Treaty of Rome and the absence of interpretations by authorities lead to the situation that corporations were not sure whether they are violating laws by doing business within the European Economic Community. The Courts explanations and decisions made during the Case 27/76 clarified some of these issues. One of the most important aspects were, that the court declared that a corporation with a market share of less than 45% can be in a dominant market position. Previously no company with a market share less than seventy perecent was considered as marketdominating. The Court however explained that the assessment of a dominant market position cannot be conducted by focussing only on the market share but on a combination of several characteristics. Another game-changing aspect was that a price policy which may produce national market segments can be considered as trade-barriers and therefore an infringement of competition laws. The Courts decision in Case 27/76 from 14 February 1979 did not only clrified vague articles of the Treaty. It lead to a situation in which a considerably larger quantity of businesses had to consider that their practices might be subject to infringement of competition laws. Furthermore, and that might be the most important aspect, it was a clear signal for an increasing willingness of the European Communities to protect the competition within their boarders. In the following coursework the Case 27/76 and...