UPS sues EC for €1.7bn over blocked TNT takeover
26 / 02 / 2018
UPS is suing the European Commission for €1.7bn over its decision to block the takeover of TNT in 2013, a decision that was later overturned.
In court documents seen by Air Cargo News, the express giant claims the European Commission should compensate it for damages incurred by the decision to block its proposed takeover of TNT, totalling €1.7bn, as well as applicable interest, and for the taxes that will be imposed on the damages.
The action was brought against the European Commission on December 29 and as of yet few details of the case are available.
The European Commission told Air Cargo News that it would defend itself in court.
A UPS spokesperson said: "We can confirm that UPS is following the legal process in seeking compensation for the losses suffered as a result of the acquisition being unfairly prohibited by the European Commission.
"We feel strongly that the proposed acquisition would have constituted a good deal for logistics customers as well as B2C consumers.
"We respect the course of the legal process but are unable to discuss any specifics relating to the claim at this time which is in the hands of the courts. The compensation being sought corresponds to what we believe, through objective assessments verified by expert third parties, to be the value of the opportunity wrongly prohibited by the European Commission.”
However, in March 2017, after UPS lodged an appeal, the decision was annulled by the European General Court on the grounds of a “procedural irregularity” by the European regulator.
Europe’s second highest court said that the commission in Brussels had “infringed UPS" rights of defence by relying on an econometric analysis which had not been discussed in its final form during the administrative procedure”.
This means the European Commission used an economic analysis that was not disclosed to UPS and it was therefore not able to respond to that analysis.
By this time, however, TNT had been acquired by Federal Express, the arch rival to UPS in the global express small package delivery services sector.
To complicate matters, the European Commission spokesperson pointed out that it has also lodged an appeal with the Court of Justice against the March 2017 annulment.
A decision is expected in the third quarter of this year and until then, the €1.7bn claim is suspended.
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